18 April 2024 Eurozone Monitor EZ energy inflation is rising, but services inflation will soon roll over

• Rising energy inflation is a threat to the June rate cut, but we think falling core inflation will do the trick.
• The early Easter sustained services inflation in March, due to a leap in airfares; it will fall in April.
• Our forecast for a July rate cut is now hanging by a thread; we’ll update our view with the April HICP.

Claus Vistesen (Chief Eurozone Economist)Eurozone

EZ Datanote: Trade Balance, Eurozone, February 2024

In one line: A setback was coming, but the improvement remains intact.

Claus Vistesen (Chief Eurozone Economist)Eurozone

16 April 2024 Eurozone Monitor ECB need not worry about a weaker euro for its decision in June

• We see little reason why the ECB should worry about the euro if it has to cut rates before the Fed.
• Our Nowcast model now points to EZ GDP rising by 0.2% in Q1, despite soft industrial production data.
• A volatile Middle East could divert attention away from Ukraine’s war with Russia; Mr. Putin knows this.

Claus Vistesen (Chief Eurozone Economist)Eurozone

EZ Datanote: Detailed Inflation, France, March 2024

In one line: A big decline, and risks are tilted towards a slide in the core in April

Claus Vistesen (Chief Eurozone Economist)Eurozone

EZ Datanote: Detailed CPI, Germany, March 2024

In one line: Pushed lower despite an early Easter boost in services.

Claus Vistesen (Chief Eurozone Economist)Eurozone

15 April 2024 Eurozone Monitor Hunting for early-Easter effects in the German and French CPI

• Our preliminary forecasts for France and Germany point to downside risks to EZ core inflation in April.
• A VAT hike on gas in Germany and higher oil prices are near-term upside risks to energy inflation.
• Italy will struggle to shrink its budget deficit to 3% any time soon; will the EU take note?

Claus Vistesen (Chief Eurozone Economist)Eurozone