- The BTP-Bund spread has fallen, in line with our call; we still believe it will hit 100bp by year-end.
- Will the attractive carry maintain foreign investor appetite for BTPs in 2024? We think so.
- Assuming no fiscal disasters, BTPs will continue to close the gap to their Spanish counterparts.
Melanie Debono (Senior Eurozone Economist)Eurozone
- Comments from ECB policymakers are keeping hopes of an April rate cut alive, but we still see June.
- The bar is high for the March HICP to deliver a down- side surprise big enough for the ECB to cut in April.
- We think bond yields will drift lower over the summer, before an inflection point in late Q3.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: GDP went nowhere last year; slowing wage growth supports June ECB rate cut.
Melanie Debono (Senior Eurozone Economist)Eurozone
In one line: Still on a downtrend, but the outlook is getting brighter.
Melanie Debono (Senior Eurozone Economist)Eurozone
In one line: Likely the beginning of a more sustained softening in net exports.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: Positive, but is it the start of a sustained pick-up?
Claus Vistesen (Chief Eurozone Economist)Eurozone
- The EZ economy remained stuck in the mud in Q4; we think growth is now rebounding, slightly.
- A rise in consumers’ spending and a lift from inventories should be key drivers of growth in 2024.
- Industrial output in Germany and Spain rose in January, but a plunge in Ireland will drive the EZ headline.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: See you in June, for the first rate cut.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: Virtually similar to January, which is now a hawkish line.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: Ignore volatility in major orders; the trend in core orders is still down.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- The ECB will cut its policy rate in June, barring a big upside surprise in the inflation numbers.
- Markets now see 100bp-worth of cuts this year; we think the ECB is happy with this picture.
- Factory orders in Germany crashed in January, but mostly due to volatility in major orders.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: The leap in exports is not backed by the surveys.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- Quarter-to-quarter GDP growth in Italy will pick up pace this year, despite falling investment...
- ...But our forecasts still point to GDP rising by just 1.0% this year, the same as last year.
- The risks to our call are a bigger fall in capex than we expect, and a smaller increase in consumption.
Melanie Debono (Senior Eurozone Economist)Eurozone
In one line: One for the hawks; slowdown easing quicker than previously thought and price intentions rise.
Melanie Debono (Senior Eurozone Economist)Eurozone
In one line: Soft, but manufacturing likely will only be a small drag on Q1 GDP growth.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- The ECB will open the door to a June rate cut this week, while emphasising the risk of sticky inflation.
- Staff projections will show a downgrade to the ECB’s headline inflation forecasts for 2024 and 2025.
- Utility margins in the Eurozone are soaring; this will soon become a hot potato for policymakers.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- Swiss inflation edged down in February; it has been in line with the SNB’s target for eight months.
- It fell less than we expected; we are pushing out our forecast for the first SNB rate cut to June.
- The changing of the guard at the SNB in September won’t alter the outlook for monetary policy.
Melanie Debono (Senior Eurozone Economist)Eurozone
In one line: Investor sentiment remains a bright spot.
Melanie Debono (Senior Eurozone Economist)Eurozone
