In one line: HICP inflation below consensus in Spain and in Germany.
Melanie Debono (Senior Eurozone Economist)Eurozone
- Money data suggest the savings rate is no longer rising, pointing to a pick-up in spending…
- ...Lending and credit figures are also turning up, consistent with stronger investment growth.
- For how long will money data remain positive? We see nascent signs they will turn down soon.
Melanie Debono (Senior Eurozone Economist)Eurozone
In one line: Fall in real money continues to slow.
Melanie Debono (Senior Eurozone Economist)Eurozone
In one line: Continuing to edge up, despite still-high unemployment fears.
Melanie Debono (Senior Eurozone Economist)Eurozone
- Destatis confirmed the decline in German GDP in Q2, despite still not publishing services data.
- Survey data for Q3 paint an ugly picture for the start of the second half of the year.
- We suspect surveys may be underestimating growth, but we will need to wait and see.
Melanie Debono (Senior Eurozone Economist)Eurozone
- Near- and longer-term consumer inflation expectations are stabilising above 2%...
- ...Firms’ selling price expectations are mixed, but analysts and forecasters see inflation reaching 2%.
- Inflation expectations support our call for further easing by the ECB in coming months.
Melanie Debono (Senior Eurozone Economist)Eurozone
In one line: Activity springs back up again thanks to the Olympics.
Melanie Debono (Senior Eurozone Economist)Global
In one line: Activity springs back up again thanks to the Olympics.
Melanie Debono (Senior Eurozone Economist)Eurozone
- Negotiated wage growth likely eased in Q2 even as compensation per employee probably held steady.
- Hourly labour cost data are the wild card; we doubt they will prevent an ECB cut in September...
- ...But early Q3 indicators, pointing to a rebound in wage growth, cast a shadow over a cut in October.
Melanie Debono (Senior Eurozone Economist)Eurozone
In one line: Imports will rise back soon, we think.
Melanie Debono (Senior Eurozone Economist)Eurozone
In one line: Resilient to weak German activity and much better than we anticipated.
Melanie Debono (Senior Eurozone Economist)Eurozone
- Energy inflation remains on track for a big fall in coming months, but it will rebound into year-end.
- EZ headline inflation will fall to within touching distance of 2% in August, but will snap back in Q4.
- Swiss GDP outpaced the Eurozone average in Q2, as industry fared better than we anticipated.
Melanie Debono (Senior Eurozone Economist)Eurozone
- Italy’s new wealth tax on foreign income will help public finances but won’t balance the books…
- ...Spending needs to come down, and significantly, to get Italy away from a near 6% deficit this year.
- As expected, the SNB intervened to stem the rise in the franc last week; more CHF sales will be needed.
Melanie Debono (Senior Eurozone Economist)Eurozone
In one line: Inflation will drop back sharply this month.
Melanie Debono (Senior Eurozone Economist)Eurozone
- Swiss industry likely had another tough quarter in Q2 and services turnover data to May disappoint.
- We doubt GDP fell, however, as implied by the PMI; it has underestimated growth since Q4 2022.
- We have pencilled in zero growth in Switzerland in Q2, after a 0.3% quarter-on-quarter increase in Q1.
Melanie Debono (Senior Eurozone Economist)Eurozone
In one line: Sales fell, but German data are missing again.
Melanie Debono (Senior Eurozone Economist)Eurozone
- House prices in Spain are currently higher than during the house price bubble in 2005-to-2008…
- ...But the current increase doesn’t look unsustainable and household finances are sound.
- We see little scope for a sharp correction in house prices in the coming quarters in Spain.
Melanie Debono (Senior Eurozone Economist)Eurozone
