- Markets are rallying on the prospect of no RN majority in France, but it’s bit too soon to cheer.
- Eurozone inflation fell further in June, and risks are tilted towards a downside surprise.
- German core inflation is now on a near-straight path towards 2% by the end of the year.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: Soft, and further declines are likely over the summer.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: Headline and core inflation fell in June.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: Rising jobless claims likely will lift unemployment further in the near term.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: EZ headline and core inflation still on track for marginal declines in June.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- Inflation in the EZ likely fell in June, by 0.1pp to 2.5%; all set for a dovish message from Sintra this week.
- Forecast upgrades in Spain and France mean we now estimate EZ GDP grew by 0.3% q/q in Q2.
- German unemployment hit a new post-Covid high in June and likely will rise a bit further in Q3.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: M1 growth is rebounding, and the credit cycle is stabilising.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- Money data point to continued upside for the PMI, which fell in June; will it rebound?
- Credit figures are consistent with rising consumers’ spending and a rebound in investment soon.
- The first June surveys for Italy and Spain suggest downside risk in the former but strength in the latter.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: No clear sign of a hit from rising political uncertainty, for now.
Claus Vistesen (Chief Eurozone Economist)Eurozone
A MODEST CYCLICAL UPTURN HAS BEGUN, AND RATES ARE FALLING
- …WILL POLITICAL UNCERTAINTY THROW A WRENCH IN THE WORKS?
Claus Vistesen (Chief Eurozone Economist)Eurozone
- Polls point to a parliament split down the middle in France, but the second-round vote is a wildcard.
- RN’s and NFP’s economic plans will anger bond markets and the EU; Mr. Macron will likely welcome this.
- Survey data so far point to only a modest hit to sentiment in France from rising political uncertainty.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- German surveys turned south in June, but don’t write off the idea of a rebound in growth just yet.
- Early hard data suggest GDP rose again in Q2, but a fall in construction will weigh on growth.
- Leading indicators tentatively hint at a bottom in German investment, but the rebound will be slow.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: Stung by renewed weakness in manufacturing.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: Hit by political uncertainty, but no panic.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- 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
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
