- The EZ PMI fell in June, but it rose solidly over Q2 as a whole; all eyes are now on the early Q3 data.
- A drop in the EZ manufacturing output PMI raises questions about the rebound in industry; a blip?
- The French PMIs were stung by political uncertainty; we think it will blow over by August.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: Still-rising; lifted by a strong labour market and firming real wage growth.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- The SNB cut rates for the second straight meeting, and lowered its inflation forecasts...
- ...We look for another 50bp-worth of rate cuts this year, more than financial markets
- expect.
The Bank will have to match ECB cuts to prevent a significant appreciation of the CHF and deflation.
Melanie Debono (Senior Eurozone Economist)Eurozone
In one line: Q1 wasn’t as good as previously thought, and output will fall back in Q2.
Melanie Debono (Senior Eurozone Economist)Eurozone
In one line: Boosted by a rebound in the surpluses of goods and services.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- The BTP-Bund spread has risen in line with French spreads; it will increase further but then fall to 100bp.
- France and Italy are in an EDP, no surprise here; any new French government has limited spending room.
- Political uncertainty will keep the EURUSD below 1.10 for now, but 1.18 by year-end is a decent bet.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: Transport, hospitality and insurance are key drivers of sticky services inflation.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- Inflation in the Eurozone was uncomfortably hot in May, but 2% over the summer is still a good bet.
- Surveys signal downward risks for services inflation, but sports events are upside risks over the summer.
- We think the ECB will cut its policy rate by 25bp in September, December and March.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- The EZ hourly labour cost growth data were the final wage indicators to be published for Q1…
- ...The data confirm wage growth picked up in Q1, but mainly due to one-offs in Germany.
- Wage growth will slow in due course, but a July rate cut is off the table; September is not certain either.
Melanie Debono (Senior Eurozone Economist)Eurozone
In one line: Imports look to be on the rise again.
Melanie Debono (Senior Eurozone Economist)Eurozone
- Swiss inflation held steady in May but is likely to fall in the coming months, to around just 1% by August.
- Weak growth will drag down domestic inflation, and gas & oil prices point to a falling imported rate.
- The SNB will probably cut its key policy rate again this week, by 25bp to 1.25%; more cuts are likely.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: Headline points to weakness but the details are more positive
Melanie Debono (Senior Eurozone Economist)Eurozone
- Italy’s economy had a decent Q1 and will continue to grow this year...
- ...But a correction in investment remains on the cards and is now likely to come as soon as Q2.
- We forecast GDP growth of 1% in 2024, as in 2023, before 1.8% next year; risks remain to the downside
Melanie Debono (Senior Eurozone Economist)Eurozone
In one line: Nasty, especially in the core, but it’ll get better soon.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- The EU is about to hit Chinese EV producers with tariffs, but this is not a full-blown trade war.
- Services inflation is rising, judging by German May CPI, but leading indicators point to weakness soon.
- German bond yields should fall between now and end-2024, but they will rebound next year.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- Le Pen’s RN is on track to become the biggest party in the National Assembly, but without a majority.
- What is the ECB watching over the summer to determine its move in September? We list the key data.
- Inflation data will support a rate cut in September, but what about wages, margins and productivity?
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: Disappointin manufacturing in Italy, a still-rising Sentix and political drama in France.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- Europe has swung to the right in the EP elections, but not dramatically so; Greens and Liberals lost big.
- Snap parliamentary elections in France could well hand Marine Le Pen the job of prime minister.
- Would a RN government ruin the party’s chance of a successful presidential bid in 2027? Perhaps.
Claus Vistesen (Chief Eurozone Economist)Eurozone