By Steven Levine

Economic releases in the Netherlands in the week ahead are poised to shine further light on the country’s manufacturing sector and rate of inflation, as Brexit uncertainties and trade-related effects continue to take a toll on the euro area.

Investors at the start of the week ahead are set to receive an update from The NEVI Netherlands Manufacturing Purchasing Managers’ Index (PMI) after February’s gauge showed the slowest improvement in overall business conditions in more than two-and-a-half years.

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Monday, April 1

• NEVI Manufacturing PMI (Mar)

According to NEVI and IHS Markit, Dutch manufacturing continued to lose momentum in February, as stagnant exports weighed on total new order growth, which slipped to a three-year low.

The latest PMI reading also indicated that output rose more sharply than new work, and as a result, stocks of finished goods expanded for a record fifth straight month. Survey respondents noted that this, along with further stockpiling of inputs, was partly attributed to Brexit preparations.

The latest survey also revealed the slowest growth of employment in almost two-and-a-half years, amid weaker output expectations.

The PMI fell to a 32-month low of 52.7 in February, from 55.1 in January, signaling weaker improvement in business conditions.

IHS Markit director Trevor Balchin said that while the Dutch PMI remained above the eurozone aggregate, “the differential between the two indices has narrowed recently from an all-time high back in September.

"Looking ahead, Dutch manufacturers are the least confident regarding output in over three years as the wider European economy is expected to slow in 2019."

In fact, the European Central Bank thinks real GDP will rise by 1.1% in 2019, 1.6% in 2020 and 1.5% in 2021, down from December’s outlook of 1.7% in 2019 and 2020.

Euro area real GDP increased by 0.2% quarter-on-quarter in the fourth quarter of 2018, following a growth of 0.1% in the third quarter on the back of a sharply weaker manufacturing sector.

Meanwhile, market participants in the latter part of the week will get a fresh read on consumer prices, which have recently risen amid higher oil prices.

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Thursday, April 4

• CPI (Mar)

Statistics Netherlands (CBS) noted that the consumer price index (CPI) was 2.6% higher in February than in the same year-ago month. In January, prices of consumer goods and services rose 2.2% year-on-year.

The higher increase in the CPI was mainly due to prices of motor fuels, with petrol costing consumers 0.9% more at the pump over the prior year, while in January it fell by 2.7% year-on-year. In February, consumers dished-out an additional 7.4% for diesel compared to the same month last year. In January, the year-on-year price increase was 1.1%.

The CPI was also pushed further upwards by prices of airfares and clothing.

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Against this backdrop, the iShares MSCI Netherlands ETF (NYSEARCA: EWN), which contains among its top holdings consumer goods giant Unilever (NYSE: UN), semiconductor firm ASML Holding (Nasdaq: ASML) and ING Group (NYSE: ING), appears headed for a golden cross, with its shares up nearly 16.7% from its latest 52-week low set December 24, 2018, according to the IBKR Trader Workstation.

EWN had fallen by more than 23.25% from its most recent 52-week peak in April 2018.

Investors will likely be watching the trajectory of the Netherlands’ manufacturing sector and inflation rate, as growth across the broader euro area continues to stall.

In the meantime, select the Event Calendar option in the IBKR Trader Workstation for a full list of Uthe .S. and global corporate events and earnings, dividend schedules, economic data, IPOs and more.