- Political uncertainty is soaring in Europe, but EZ equities have never felt better; what’s up?
- We think markets are betting on another Hamiltonian moment in Europe, this time on defence policy.
- Europe will rise to the challenges it faces, but have markets bought into the hype too strongly?
Claus Vistesen (Chief Eurozone Economist)Eurozone
- A peace deal or ceasefire in Ukraine is unlikely to drive near-term relief in Eurozone energy prices.
- The EZ GDP growth slowdown in Q4 was smaller than previously thought...
- ...And EZ productivity growth picked up; or did it? Our ECB call is unchanged either way.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: Soft in CPI, but the core HICP is sticky, and selling prices are rebounding.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- Bunds have hovered close to fair value since the beginning of the year, according to our models.
- US Treasuries and Schatz point to upside risks to Bund yields, but fundamentals pull the other way.
- Near-term risks to Bund yields are tilted to the downside, before bear-steepening in H2.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: Decent, but also behind the Trump-curve.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- US tariffs on steel and aluminium would have only a minimal direct impact on EZ exports and GDP…
- …But the constant threat of tariffs is raising uncertainty for firms, adding to downside risks for capex.
- The CDU/CSU remains in pole position in Germany, but it is ceding ground to the AFD.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: Output stung by falling auto production; exports finish 2024 on a strong note.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- Attempts by the ECB to persuade markets to give up focusing on the neutral rate are laudable, but futile.
- The ECB’s own forecasts suggest that the policy rate should stabilise at neutral, wherever that is.
- EZ industrial production fell sharply in December, but we look for a solid rebound in January.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: Signs of underlying strength, despite boost from major orders.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: Poor, but output likely rebounded in January.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- Bonds rallied yesterday on dovish headlines in the ECB’s wage tracker, but the details beg to differ.
- The EU is ready to strike back at US tariffs, but we still see a low risk of a prolonged tariff spat.
- ‘Habemus budget’ in France; industrial output fell in December, but it will rebound in January.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: Hot, but all eyes on tariffs this morning.
Claus Vistesen (Chief Eurozone Economist)Global
In one line: Hot, but all eyes on tariffs this morning.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- President Trump will soon impose tariffs on imports from the EU, but the details are still up in the air.
- A 10pp increase in tariffs on EU goods is all but fully factored in by the drop in EURUSD since Q3.
- EZ headline and core inflation beat the consensus in January; still no perfect landing at 2% in sight.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: Unemployment is still rising; soft state CPIs can’t be extrapolated to the HICP.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: Still (very) friendly to ECB doves.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: A poor finish to 2024, but probably not as bad as initially reported.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- We now see EZ headline inflation unchanged at 2.4% in January, with a 0.1pp dip in the core, to 2.6%.
- Selling price expectations are rising in Germany and France, but core inflation will dip further in Q1.
- Is the consumption recovery in the Eurozone finally kicking in? We think so.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: GDP growth slowed at end-2024 despite continued strength in the labour market. ESI points to better times ahead.
Claus Vistesen (Chief Eurozone Economist)Eurozone
