In one line: Dovish, but upside risks loom in Q4.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- EZ GDP rose less than expected in Q2, mainly due to downward revisions to French and Irish GDP.
- Consumption and investment held back growth, while net trade did all the heavy lifting.
- Compensation-per-employee growth eased, in line with other measures of wage growth.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- EZ inflation fell to its lowest since July 2021 in August, marginally above the ECB’s target...
- ...The Bank will find it hard to justify its current restrictive stance, especially with wage growth easing.
- We think a September rate cut is more likely than not and keep our October cut in too, for now.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: Solid, but not enough to reverse the plunge in July.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: Services boosted by the Olympics; manufacturing is sinking without a trace.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: Energy inflation will back in August and September; the core will remain high.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: A record high, but not sustainable; net portfolio flows are shifting.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- The Eurozone’s trade surplus rebounded in June, but net trade in goods likely dragged on growth in Q2.
- We’re expecting this net trade drag on growth to continue for up to 12 months.
- The trend in import growth, however, remains much weaker than implied by our consumption forecasts.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: Q2 GDP increase confirmed, despite another drag from industry.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- The link between the ECB’s policy rate and the Taylor Rule, which broke after the GFC, is reasserting itself.
- A Taylor Rule with inflation expectations suggests the ECB is behind the curve on easing.
- The model also indicates that the policy rate won’t fall as much as the consensus expects.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: Recessionary, but what’s happening in consumption?
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: Relief, but it will be short-lived.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: A relief, but production likely fell back in July.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- Swiss inflation held steady in July, but this means it was still in line with the SNB’s target.
- The headline inflation rate will creep lower in the coming months, allowing for further easing.
- EZ industry ended Q2 on a good note, enough to escape recession last quarter and boost GDP.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: Blame Italy for the upside surprise.
Claus Vistesen (Chief Eurozone Economist)Eurozone
