- Sell EURUSD and bonds if you’re convinced that Mr. Trump will win Tuesday’s US election.
- Leading indicators for EZ investment are downbeat, but growth still has room to rebound, a touch.
- Capacity utilisation rates point to robust growth in services capex, and the inventory cycle is turning.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- Swiss inflation surprised to the downside in October, falling to a 40-month low of just 0.6%.
- The headline will likely be further below the SNB’s call in Q4, so we now look for even more easing.
- A floor exists, however; the SNB is heading towards the zero lower bound.
Claus Vistesen (Chief Eurozone Economist)Eurozone
ECB DOVES HAVE THE UPPER HAND
- BUT THEY WILL STRUGGLE TO PUSH THROUGH 50BP IN DECEMBER
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: A big blow to hopes of a 50bp cut in December.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- A trio of strong data tilts the balance of risk further in favour of a 25bp rate cut in December.
- Core inflation was firmer than expected in October, and it will increase a touch in November too.
- The ECB battle over the neutral rate has begun; Ms. Schnabel likely sees a relatively high number.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: Recession averted (again), labour market weakness continues and upside risks to October inflation.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: Decent, but nothing to write home about ex-Olympic boost.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- EZ GDP rose more than we and the ECB had expected in Q3, and growth picked up from Q2.
- France, Spain and Germany all contributed positively, while GDP stagnated in Italy.
- Advance CPI data in Germany and Spain point to upside risks to EZ core inflation today.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- Money supply and lending growth picked up further at the end of Q3, a good sign for EZ GDP growth.
- ECB surveyed inflation expectations dropped in September but will likely rebound in Q4.
- The IFO survey in Germany improved marginally in October, but the IESI in Italy stumbled.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- The dovish shift in expectations for ECB policy and interest rates continues apace.
- Soft PMIs will add to the conviction in markets that an accelerated easing cycle is underway…
- …But next week’s calendar will likely be more challenging for dovish EZ rate expectations.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- EURUSD won’t make it to 1.15 by year-end, but we still think it will get there, eventually, in H1 2025.
- Our inflation, interest rate and GDP forecasts signal upside risks for EURUSD from its current level…
- …But the trend in political uncertainty points to downside risk to this call.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: An inevitable correction; further softness ahead.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- The ECB's Bank Lending Survey points to looser lending standards and rising demand for credit...
- ...supporting our view that growth in investment and household consumption will turn a corner soon.
- Nowcast models for Q3 GDP point to downside risks to growth; we think they're misleadingly negative.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: Growth indicators are rising in importance for policymakers.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: The first big win for ECB doves in a long time.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: The trump card ECB doves need for a third rate cut today.
Claus Vistesen (Chief Eurozone Economist)Eurozone
