In one line: In line with our call for slightly softer German inflation in June.
Melanie Debono (Senior Eurozone Economist)Eurozone
In one line: EZ money and credit data still positive on economic outlook.
Melanie Debono (Senior Eurozone Economist)Eurozone
- Total HICP inflation prints for the Big Four suggest EZ headline inflation edged up to 2.0% in June.
- The ECB strategy review suggests the central bank is doing the right thing with the right tools; go figure!
- Money data still point to upside risks to GDP, but don’t capture what is happening in net trade.
Melanie Debono (Senior Eurozone Economist)Eurozone
In one line: Another fall in inflation expectations.
Melanie Debono (Senior Eurozone Economist)Eurozone
In one line: Pointing to upside risks for our Q2 consumption call.
Melanie Debono (Senior Eurozone Economist)Eurozone
In one line: A slight rebound in inflation and consumers’ spending on course for a better Q2 than Q1
Melanie Debono (Senior Eurozone Economist)Eurozone
- French and Spanish headline inflation rose in June, pointing to upside risk to our EZ call.
- We are sticking to our forecast for an increase in the EZ headline to 2.0% from 1.9%.
- That marks a small rise, which need not worry the ECB, especially given stable inflation expectations.
Melanie Debono (Senior Eurozone Economist)Eurozone
THE NEXT STEPS FOR THE ECB ARE FINELY BALANCED...
- ...WE STILL SEE A FINAL CUT TO 1.75%, SETTING UP HIKES NEXT YEAR
Melanie Debono (Senior Eurozone Economist)Eurozone
In one line: A fall after improving throughout Q2.
Melanie Debono (Senior Eurozone Economist)Eurozone
- Early national data suggest the fall in EZ consumer confidence in June was focused outside the big two.
- The details indicate that risks to spending in Q2 are still to the downside in France and Germany.
- Indeed figures show slowing wage growth in Italy in May, but a pick-up in France and Spain.
Melanie Debono (Senior Eurozone Economist)Eurozone
- Falling oil prices and a strong euro are playing into the hands of ECB doves, for now.
- Services inflation is a key upside risk in the June HICP, but we still see core inflation at 2% by August.
- Fiscal details and a US-EU trade deal could swing the September meeting in favour of ECB hawks.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: At a one-year high, but still consistent with slower growth.
Melanie Debono (Senior Eurozone Economist)Eurozone
- German business surveys are on the rise, but the hard data are not; at least, not yet…
- ...The cabinet approved the 2025 supplementary budget; parliament must do likewise by September.
- The rise in public spending and capex will feed through only in Q4 or, more likely, from 2026.
Melanie Debono (Senior Eurozone Economist)Eurozone
In one line: Stuck in the mud, but also underestimating growth.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- The EZ PMI held steady in June, and averaged broadly the same in Q2 as in Q1…
- ...But EZ GDP will not repeat its 0.6% growth in Q1; we look for GDP to stagnate this quarter.
- Demand is recovering but, once tariff front-running ends, will likely correct; price pressures are easing.
Melanie Debono (Senior Eurozone Economist)Eurozone
