In one line: Improving, but net trade in services will be a drag on growth in Q4.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: Stung by a plunge in energy production; core manufacturing fell slightly.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- In France, Mr. Macron must go back to the drawing board as his government is ousted.
- German orders and French industrial production show industry was still on the back foot in October…
- ...Clouds continue to form on the horizon, even if some boost will come from pre-tariff US orders.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: The government falls; industrial production on track for a fall in Q4.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- The ECB will cut its main policy rates by 25bp this week; listen closely for references to the neutral rate.
- Ms. Lagarde will struggle to meet dovish market expectations this week; expect hawkish re-pricing.
- EZ domestic demand jumped in Q3, but growth is set to come down sharply in Q4.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- Our energy inflation forecasts have shifted higher in recent weeks, as 2025 gas prices have firmed.
- Barring a big shift in oil prices, inflation in liquid fuels will trough in Q2 and then rise for most of H2 2025.
- Wholesale gas prices now point to positive inflation in the electricity and gas HICP for most of 2025.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- Swiss inflation edged up but remains low enough for the SNB to cut its key policy rate by 50bp next week...
- ...New Chairman Martin Schlegel’s recent comments support our call for a bigger-than-consensus cut.
- French budget woes are pulling the OAT-Bund spread up towards the 100bp mark.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- Detailed data show a jump in consumers’ spending prevented a fall in Italian GDP in Q3.
- Consumers will continue to lead the way, and we are revising up our call for Q4 growth.
- But GDP will still likely rise by just 0.5% this year, half of the government’s latest forecast.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: German joblessness is still rising; rise in inflation expectations a lagged effect of rebounding inflation.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: French inflation signals EZ HICP in line with the consensus.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: French inflation signals EZ HICP in line with the consensus.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: A setback, but seasonals look unduly restrictive.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: HICP headline likely held back by falling food inflation, but the core firmed.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: The rebound in narrow money is accelerating.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: In line with expectations, just about.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- The scene is set for a hard-fought ECB meeting later this month; we still look for a 25bp cut…
- …But we’re adding a 25bp cut in January to our forecasts, as ECB doves now have the upper hand.
- Swiss GDP growth slowed a touch in Q3, but we look for a rebound in Q4; the SNB will cut in December.
Claus Vistesen (Chief Eurozone Economist)Eurozone
ECB DOVES STILL HAVE THE UPPER HAND...
- ...BUT THEY WON’T GET A 50BP CUT IN DECEMBER
Claus Vistesen (Chief Eurozone Economist)Eurozone
- We still see EZ HICP inflation at 2.3% in November, but we’re lifting our core forecast by 0.1pp, to 2.9%.
- Our model, based on the negative skew in ESI data,still points to low recession risk in the EZ.
- The upturn in real M1 growth is a positive—andmincreasingly contrarian—signal for the EZ economy.
Claus Vistesen (Chief Eurozone Economist)Eurozone
