Pantheon Publications

22 March 2024 Eurozone Monitor SNB steps into spring with a policy rate cut

• The SNB cut interest rates, beating other major DM central banks to the punch on easing policy. 
• More easing is likely over the coming year; we look for 75bp of further cuts by December. 
• The risks are to fewer cuts; the SNB sees inflation in line with its price-stability mandate out to 2026.

Melanie Debono (Senior Eurozone Economist)Eurozone

EZ Datanote: Advance Consumer Confidence, Eurozone, March 2024

In one line: A sign of more to come.

Melanie Debono (Senior Eurozone Economist)Eurozone

EZ Datanote: Industrial Production, Italy, January 2024

In one line: Recovery in Italian industry is delayed.

Melanie Debono (Senior Eurozone Economist)Eurozone

21 March 2024 Eurozone Monitor Plenty of reasons for an SNB rate cut today, but we think it will hold

• It’s a close call, but we think the SNB will hold fire at today’s meeting and first cut in June instead.
• Risks are tilted towards a rate cut today; markets are pricing in 40% probability of a move.
• mItalian industrial production started the year on a weak footing, but EZ construction is holding up.

Melanie Debono (Senior Eurozone Economist)Eurozone

20 March 2024 Eurozone Monitor Slowing EZ labout cost growth supports ECB easing to start soon

• Hourly labour cost growth took a leg down in Q4, in line with other wage growth measures.
• Leading indicators suggest pay growth is easing again in Q1; we look for it to fall throughout 2024.
• The ECB can’t afford to wait for the all clear from wage negotiations to start easing policy.

Melanie Debono (Senior Eurozone Economist)Eurozone

EZ Datanote: Detailed Inflation, Eurozone, February 2024

In one line: Next couple of months’ data will be more noise than signal.

Melanie Debono (Senior Eurozone Economist)Eurozone

18 March 2024 Eurozone Monitor EURUSD to rise further this year; Spain budget delay no big deal

• Interest-rate and core-inflation differentials still point to upside risks for EURUSD.
• We continue to believe EURUSD is good value below 1.10; a rise to 1.15 should be possible.
• Spain will continue to outperform despite the government ditching its attempt to set a budget.

Melanie Debono (Senior Eurozone Economist)Eurozone