- A lot can still go wrong in the EZ economy, but the data suggest that GDP growth firmed in Q1.
- Early data imply that EZ services production rebounded strongly in the first quarter.
- Mild weather boosted construction in Q1, and manufacturing, ex-Ireland, improved too.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- This week’s ECB meeting will be a dovish hold; Ms. Lagarde will lay the foundation for a June cut.
- The consensus and markets see the ECB’s policy rate falling below 2.5% in 2025; we beg to differ.
- Rising production in industry and services points to upside risks to German GDP growth in Q1.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: Much better; time to lift Q1 GDP growth forecasts?
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: Held back by a plunge in energy output; core production did better.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- EZ inflation surprised to the downside in March, but not enough for the ECB to pull the trigger next week.
- Services inflation was sustained by the early Easter in March; it will come down sharply in April.
- We expect EZ headline inflation to stabilise around 2% from August through to Q1 next year.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: EZ inflation on track to undershoot the consensus tomorrow.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: Solid, but is fiscal tightening now a downside risk?
Claus Vistesen (Chief Eurozone Economist)Eurozone
- German consumer confidence remains depressed, but the headlines are poor indicators of spending.
- Rising real income growth and a stabilisation in the labour market are tailwinds for German consumers…
- ...But early-Q1 data on retail and car sales point to near-term downside risks for consumption growth.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: Boosted by a soaring surplus in goods.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: Lifted by strong momentum in Southern Europe.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: Better, but likely not enough to prevent another decline in GDP in Q1.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: On track for a rise in Q1, surprisingly.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: Investor sentiment is still rising; a dovish plunge in EZ labour cost growth.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: Falling imports are still lifting EZ net trade in goods.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- EZ inflation dipped in February, matching the first estimate; upside risks are now building for March.
- An upward surprise in the March and April inflation reports would put a June rate cut in jeopardy.
- We still struggle to see a perfect landing for inflation at 2%; how will the ECB respond to this?
Claus Vistesen (Chief Eurozone Economist)Eurozone
