In one line: Up, like the PMI; inflation expectations remain anchored.
Melanie Debono (Senior Eurozone Economist)Eurozone
- The small 0.2% q/q increase in Italian GDP in Q2 was confirmed; net trade held back growth...
- ...But so did construction investment, where dwellings investment is falling.
- Both trends will be offset by a rebound in inventories and stronger consumers’ spending in H2.
Melanie Debono (Senior Eurozone Economist)Eurozone
- Spanish inflation was pulled down sharply in August by falling energy inflation.
- The German headline also took a leg down, to a 41-month low, despite stable services inflation.
- We now think EZ inflation data today will show a 2% print for August; EZ inflation is at the ECB’s target.
Melanie Debono (Senior Eurozone Economist)Eurozone
In one line: HICP inflation below consensus in Spain and in Germany.
Melanie Debono (Senior Eurozone Economist)Eurozone
- Money data suggest the savings rate is no longer rising, pointing to a pick-up in spending…
- ...Lending and credit figures are also turning up, consistent with stronger investment growth.
- For how long will money data remain positive? We see nascent signs they will turn down soon.
Melanie Debono (Senior Eurozone Economist)Eurozone
In one line: Fall in real money continues to slow.
Melanie Debono (Senior Eurozone Economist)Eurozone
In one line: Continuing to edge up, despite still-high unemployment fears.
Melanie Debono (Senior Eurozone Economist)Eurozone
- Destatis confirmed the decline in German GDP in Q2, despite still not publishing services data.
- Survey data for Q3 paint an ugly picture for the start of the second half of the year.
- We suspect surveys may be underestimating growth, but we will need to wait and see.
Melanie Debono (Senior Eurozone Economist)Eurozone
In one line: Solid, but not enough to reverse the plunge in July.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- The downturn in the EZ composite PMI was halted by the Olympics in France; only temporarily we think.
- The PMIs point to firming growth in services, while manufacturing is still stuck in recession.
- A big drop in Q2 wage growth seals the deal for a September cut, and helps our call for an October cut.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: Activity springs back up again thanks to the Olympics.
Melanie Debono (Senior Eurozone Economist)Global
In one line: Activity springs back up again thanks to the Olympics.
Melanie Debono (Senior Eurozone Economist)Eurozone
In one line: Services boosted by the Olympics; manufacturing is sinking without a trace.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- Construction output jumped in June but still fell over the second quarter as a whole…
- ...This is consistent with a drop in construction capex, which accounts for nearly half of investment in GDP.
- The outlook for the sector is bleak; it will remain a drag on growth for the rest of this year.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- EZ inflation data suggest market pricing for 70bp-worth of easing this year is much too ambitious.
- The ECB will cut by 25bp in September; we still see a second cut in October, but this is a very close call.
- Inflation in food, core goods and energy are all set to firm in Q4, and services inflation will fall only slightly.
Claus Vistesen (Chief Eurozone Economist)Eurozone
