- Eurozone headline and core inflation likely undershot the consensus in February.
- Today’s data should be the first clear sign that EZ services inflation is now falling, from a trend of 4%.
- EZ consumers’ spending on goods saw a slow start to 2025, but don’t write off Q1 just yet.
Melanie Debono (Senior Eurozone Economist)Eurozone
In one line: Business sentiment eases despite improvement in manufacturing.
Melanie Debono (Senior Eurozone Economist)Eurozone
- Swiss GDP rose by 0.5% on the quarter in Q4, much better than the measly 0.1% growth in EZ GDP.
- Growth will slow, falling in line with that in the EZ, as net trade drags on GDP and spending growth slows.
- The US President has fired another tariff threat at the EU, but we are still in waiting mode.
Melanie Debono (Senior Eurozone Economist)Eurozone
In one line: Little sign of recovery in consumer confidence, but maybe the election changed that.
Melanie Debono (Senior Eurozone Economist)Eurozone
- EZ consumers’ spending likely rose by 0.4-to-0.5% in Q4, and we look for the same in Q1.
- We still think a stabilisation in the saving rate will underpin consumption growth this year.
- Consumer confidence data point to a sticky saving rate, but are an unreliable guide.
Melanie Debono (Senior Eurozone Economist)Eurozone
- Huge volatility under the hood of German Q4 GDP; inventories and net trade are key for H1.
- We see full-year 2025 growth of 0.5% in Germany, lower than previously but above consensus.
- EZ negotiated wage growth retreated in Q4, after the one-off-related jump in Q3; further falls are likely
Melanie Debono (Senior Eurozone Economist)Eurozone
In one line: Steady; not a reflection of firms’ attitudes to election result.
Melanie Debono (Senior Eurozone Economist)Eurozone
In one line: Up again, in line with our call for a rebound in GDP.
Melanie Debono (Senior Eurozone Economist)Eurozone
In one line: Further increases are likely as political uncertainty abates.
Melanie Debono (Senior Eurozone Economist)Eurozone
In one line: Construction boost to growth in Q4 unlikely to repeat in Q1.
Melanie Debono (Senior Eurozone Economist)Eurozone
- Isabel Schnabel has added fuel to the idea that the ECB’s easing cycle will end soon; we agree.
- President Trump’s latest tariff threat—on cars, chips and drugs—would have a small impact on EZ GDP.
- The CDU/CSU will win the German election, but not by enough for a majority; brace for coalition talks.
Melanie Debono (Senior Eurozone Economist)Eurozone
In one line: Up sharply, consistent with a better outlook for the EZ economy.
Melanie Debono (Senior Eurozone Economist)Eurozone
- US reciprocal tariffs, ex-VAT inclusion, would raise tariffs for 26% of EZ exports to the US…
- ...But these account for just 4% of total EU exports to the US, so the hit to EZ GDP would be small still.
- Swiss GDP growth picked up in Q4, as we expected and despite soft surveys.
Melanie Debono (Senior Eurozone Economist)Eurozone
In one line: Still no signs of much tariff front running by US firms.
Melanie Debono (Senior Eurozone Economist)Eurozone
