In one line: Pointing to downside risks to our rebound call.
Melanie Debono (Senior Eurozone Economist)Eurozone
- ECB hawks will pounce on signs from the PMI of continued upward price pressures in services...
- ...But the PMIs continue to suggest the EZ economy remains in a rut & manufacturing costs are sliding.
- January’s inflation read will be more decisive for the timing of the ECB’s first rate cut; March is our call.
Melanie Debono (Senior Eurozone Economist)Eurozone
- Lending standards were tightened again in Q4, albeit less than in Q3; banks blamed risk perception.
- Demand for loans again fell across the board, partly reflecting the continued rise in interest rates.
- ECB doves can use the BLS to argue that financial conditions can ease, but will they?
Melanie Debono (Senior Eurozone Economist)Eurozone
In one line: In line with our view that the Q1 recovery in German GDP will be muted
Melanie Debono (Senior Eurozone Economist)Eurozone
- The fall in EZ residential house prices was extended in Q3, and likely again in Q4.
- In 2024, house prices should recover somewhat as demand rebounds, but not until the end of the year.
- We look for house prices to fall by 3.5% this year after a likely near-2% decline in 2023.
Melanie Debono (Senior Eurozone Economist)Eurozone
In one line: Industry was still in recession in Q4; boost from net trade was likely offset by weakness elsewhere last quarter.
Melanie Debono (Senior Eurozone Economist)Eurozone
- Italian industrial output fell in November, defying the otherwise decent trail of hard data for Q4.
- We are sticking to our call for a 0.2% slide in GDP, setting up a weak base for this year.
- Quarter-on-quarter GDP growth will rebound this year, but the recovery will be gradual and tepid.
Melanie Debono (Senior Eurozone Economist)Eurozone
In one line: Wage growth will still slow if the labour market remains tight.
Melanie Debono (Senior Eurozone Economist)Eurozone
In one line: Did net trade boost GDP in France as it likely did in Germany in Q4?
Melanie Debono (Senior Eurozone Economist)Eurozone
- The small increase in Swiss inflation in December leaves it in line with the SNB’s target...
- ...Inflation will fall back soon, despite the VAT hike; we look for the Bank to cut its policy rate in March.
- EZ unemployment will rise, though only marginally; still-low joblessness need not deter ECB rate cuts.
Melanie Debono (Senior Eurozone Economist)Eurozone