In one line: Lifted by a leap in the primary income surplus.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- EZ fiscal policy is now consolidating but will remainmuch looser than before the pandemic.
- We think the Italian government is too optimistic on its deficit-reduction this year, and until 2026 too.
- The path for Germany’s fiscal position will depend on spending, while revenues matter most in France.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: The core should fall a bit further over the summer, but 2% is likely the new trend.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- GDP growth in the Eurozone rebounded at the start of 2024, matching the initial estimate.
- A fall in German construction will weigh on EZ growth in Q2, but the overall upturn will continue.
- EZ employment growth slowed in Q1, but surveys suggest the worst is now over.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: Soft, but beware the risk of a snap-back in services inflation in May.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- Indeed data show that EZ wage growth slowed further in April; a win for ECB doves.
- Catalonia election led to a win for PSC; can it garner a coalition to avoid a repeat election in the autumn?
- German services inflation will rise in May, as the Deutschland ticket falls out of the year-over-year rate.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- Investor sentiment has further to climb, judging by the impressive rally in equities so far this month.
- Rising investor sentiment signals a continued rise in the PMIs, but seasonality suggests otherwise.
- All eyes on detailed services inflation this week for evidence that the fever is breaking.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: A setback, in line with the surveys.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line : Grim, but the reality on the ground is likely better.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- Real rates are still rising sharply in the Eurozone; it makes sense for the ECB to cut rates soon.
- Bonds are not priced for the ECB deposit rate to stay at 4%; if they were, yields would be a lot higher.
- What are the ECB’s assumptions for rates underlying its inflation forecasts? Answers on a postcard…
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: The core is still drifting lower, but slowly does it.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: Solid, but construction was boosted significantly by mild weather.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: Someone forgot the give French services inflation the memo, but core inflation fell, all the same.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: Decent, but growth in domestic demand likely will slow a tad in Q2.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- EZ core inflation fell further in April; the June rate cut looks safe, but July’s is hanging in the balance.
- EZ GDP rose by 0.3% in Q1, in line with our forecast; country data suggest net trade was the main boost.
- Southern economies did the heavy lifting, again, and likely will continue to outperform this year.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: Headline in line; services inflation a touch higher than we anticipated.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- Early April HICP data in Spain and Germany confirm that energy inflation rose, while core inflation dipped.
- We’re lowering our EZ headline inflation forecast by 0.1pp, to 2.4%; the core likely fell by 0.4pp, to 2.5%.
- The Irish economy sprang back to life in Q1; we still look for EZ GDP to have risen by 0.3% in the quarter.
Claus Vistesen (Chief Eurozone Economist)Eurozone