In one line: French industry intends to make hay while the sun is still shining.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: Lifted by tariff front-running, still pointing to downside risks to growth.
Melanie Debono (Senior Eurozone Economist)Eurozone
In one line: Resilient, but labour market prospects remain difficult.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: Don’t show Donald Trump the trade charts; Construction down but still defied surveys in Q1
Melanie Debono (Senior Eurozone Economist)Eurozone
In one line: Trade wars are not good for firm morale.
Melanie Debono (Senior Eurozone Economist)Eurozone
In one line: As in France, domestic demand is rattled by tariff concerns and PMI shows clear signs of tariff front-running.
Melanie Debono (Senior Eurozone Economist)Eurozone
- Most near-real-time consumers’ spending indicators suggest it is holding up well in April.
- The trade war also hasn’t hit job postings, while Google searches for ‘unemployment’ are down.
- Leading indicators on production, meanwhile, reflect greater activity, boosted by tariff front-running.
Melanie Debono (Senior Eurozone Economist)Eurozone
In one line: Fastest fall in demand for services since Covid pulls down the headline.
Melanie Debono (Senior Eurozone Economist)Eurozone
- Soft April PMIs signal downside risk to our Q2 GDP call, but we still think tariff front-running will help.
- Demand for services is retreating, confirming that trade uncertainty is weighing on domestic demand.
- Manufacturing is holding the fort for now, with new orders recovering thanks to tariff front-running.
Melanie Debono (Senior Eurozone Economist)Eurozone
In one line: EZ consumers didn’t like Trump’s tariff announcements.
Melanie Debono (Senior Eurozone Economist)Eurozone
- We look for a chunky decline in the April PMIs; falling new orders likely will bear the brunt of the hit.
- The euro’s rise is supported by strong portfolio inflows, which look set to continue in Q2.
- Is euro strength a sign of a more structural shift in FX reserve portfolios? Perhaps, but it’s too soon to say.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- The ECB is making a dovish shift, conditional on a benign tariff outcome for core inflation.
- Energy prices and the euro can be cruel mistresses for policymakers looking for signals on inflation.
- Markets are pricing in the tail-risk for ECB rates; we still think the Bank will be more conservative.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: Easing, as economic uncertainty rises.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: Falling oil prices and a stronger euro are gifts to ECB doves.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: Tariffs hit investor sentiment hard; industrial production will feel the tariff burn but not until later in the year probably.
Melanie Debono (Senior Eurozone Economist)Eurozone
In one line: Banks tighten lending standards for firms & demand for credit eases again even before the shock of “Liberation Day".
Melanie Debono (Senior Eurozone Economist)Eurozone
- Downside risks are building for EZ inflation, due mainly to the accelerated decline in energy prices.
- Initial evidence points to a disinflationary tariff shock to EZ core goods inflation, but keep an open mind.
- Services inflation will snap back in April, due to Easter effects, but the trend is still downward.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: Soft, but selling prices point to upside risks for the core.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- Banks tightened lending standards less in Q1 than in Q4, but were already worried about tariffs in March…
- ...They expect to tighten lending standards further, while demand for loans among firms fell.
- We revise up our Swiss GDP forecasts, on the back of the 90-day pause to tariff hikes.
Melanie Debono (Senior Eurozone Economist)Eurozone
- Re-routing could lead to a bigger EZ trade surplus with the US, increasing the risk of higher US tariffs…
- ...One of the ways to stem the flow would be for the EU to hike its tariffs on China; it prefers not to.
- The EU is at great risk of being pulled into the US-Sino trade war, whether it wants to or not.
Melanie Debono (Senior Eurozone Economist)Eurozone
