4 June 2024 Eurozone Monitor All set for a hawkish first 25bp rate cut by the ECB this week

• The ECB will cut its policy rate by 25bp this week, but the communication will be hawkish.
• How does the ECB stay open to further easing without pre-committing to cuts? We’re about to find out.
• We see little change to the ECB’s near-term inflation forecasts, assuming it is omitting the May HICP.

Claus Vistesen (Chief Eurozone Economist)Eurozone

May 2024 - EZ Economic Chartbook

THE FIRST ECB RATE CUT IS COMING...

• …BUT A JULY CUT IS OUT, AND SEPTEMBER IS AT RISK TOO

Claus Vistesen (Chief Eurozone Economist)Eurozone

EZ Datanote: Final Manufacturing PMIs, Eurozone, May 2024

In one line: Rebounding, slowly. 

Claus Vistesen (Chief Eurozone Economist)Eurozone

EZ Datanote: Advance Inflation, EZ, May 2024

In one line: Services too hot to handle, but the trend isn’t 4%.

Claus Vistesen (Chief Eurozone Economist)Eurozone

EZ Datanote: Detailed GDP, Italy, 2024

In one line: Domestic demand, including inventories, rose; net exports plunged. 

Claus Vistesen (Chief Eurozone Economist)Eurozone

EZ Datanote: Advance Inflation & Consumers' Spending, May/Apr 2024

In one line: The HICP comes in hot; April spending dented by Easter seasonals.

Claus Vistesen (Chief Eurozone Economist)Eurozone

EZ Datanote: Retail Sales, Germany, April 2024

In one line: Disappointing, but don’t write off Q2 consumption just yet.

Claus Vistesen (Chief Eurozone Economist)Eurozone

3 June 2024 Eurozone Monitor Services inflation in the EZ as grim as ever midway through Q2

• EZ services inflation snapped back in May; it will come down eventually, but this will take a while.
• The ECB will cut its policy rate this week, but hopes of a July cut are now lost; September is at risk too.
• EZ consumers’ spending, ex-services, fell in April, but this was mainly due to Easter seasonals in food.

Claus Vistesen (Chief Eurozone Economist)Eurozone

EZ Datanote: Unemployment & EC Sentiment, EZ, Apr/May 2024

In one line: The EZ labour market is in a good spot.

Claus Vistesen (Chief Eurozone Economist)Eurozone

31 May 2024 Eurozone Monitor EZ headline inflation likely rose in May, matching the consensus

• Inflation in the Eurozone likely rose a touch in May, to 2.5%, in line with the consensus.
• The EZ labour market is in rude health but poses no threat to the slowdown in wages and inflation, yet. 
• The Swiss economy performed better than initially estimated in Q1, boosted by services.

Claus Vistesen (Chief Eurozone Economist)Eurozone

EZ Datanote: Advance Inflation, Germany, May 2024

In one line: Jump in services inflation stands out like a sore thumb.

Claus Vistesen (Chief Eurozone Economist)Eurozone

EZ Datanote: German State CPIs & EZ Money Supply, May/April 2024

In one line: German core and headline inflation rebounded in May.

Claus Vistesen (Chief Eurozone Economist)Eurozone

EZ Datanote: GfK & INSEE Consumer Confidence, GER & FRA, June/May

In one line: Looking up in Germany, but stalling in France.

Claus Vistesen (Chief Eurozone Economist)Eurozone