10 April 2024 Eurozone Monitor Which HICP components lead Eurozone wage growth?

• EZ compensation-per-employee growth slowed in Q1, but what about negotiated wages?
• The HICP components most correlated with wage growth point to a significant slowdown in H1 2024.
• The Q1 bank lending survey is not the slam dunk for ECB doves that many seem to believe.

Melanie Debono (Senior Eurozone Economist)Eurozone

9 April 2024 Eurozone Monitor All set for a dovish hold by the ECB this week; rates will be cut in June

• 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

EZ Datanote: Sentix, Eurozone, April 2024

In one line:  Pointing to further gains in the PMI.

Melanie Debono (Senior Eurozone Economist)Eurozone

EZ Datanote: Industrial Production & Trade Balance, Germany, February

In one line: Much better; time to lift Q1 GDP growth forecasts?

Claus Vistesen (Chief Eurozone Economist)Eurozone

EZ Datanote: Retail Sales, EZ, February 2024

In one line: A German-led plunge.

Melanie Debono (Senior Eurozone Economist)Eurozone

EZ Datanote: Industrial Production, Spain, February 2024

In one line: Industry is a key reason Spain outperformed in Q1.

Melanie Debono (Senior Eurozone Economist)Eurozone

EZ Datanote: Industrial Production, France, February 2024

In one line: Held back by a plunge in energy output; core production did better.

Claus Vistesen (Chief Eurozone Economist)Eurozone

EZ Datanote: Final PMIs, Eurozone, March 2024

In one line: Liftoff?

Claus Vistesen (Chief Eurozone Economist)Eurozone

EZ Datanote: Inflation, Switzerland, March 2024

In one line: A downside surprise, as in the EZ.

Melanie Debono (Senior Eurozone Economist)Eurozone

5 April 2024 Eurozone Monitor Swiss CPI implies more SNB cuts; EZ house prices fell in Q4

• The fall in Swiss inflation in March solidifies our view that more SNB rate cuts are on the way this year.
• EZ house prices fell in Q4 and were down by 1.1% in 2023 overall; we look for another 1% drop this year.
• The PMI adds to the evidence that Spain’s economic outperformance continued in Q1; we concur.

Melanie Debono (Senior Eurozone Economist)Eurozone

EZ Datanote: Unemployment, Eurozone, February 2024

In one line: Staying where it's been for most of the past year.

Melanie Debono (Senior Eurozone Economist)Eurozone

4 April 2024 Eurozone Monitor Core inflation in March softer than implied by the headline

• 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

EZ Datanote: Final Manufacturing PMI, EZ, March 2024

In one line: Still touch and go for the recovery in EZ industry.

Melanie Debono (Senior Eurozone Economist)Eurozone

3 April 2024 Eurozone Monitor EZ inflation likely fell to just over 2% in March; what now, ECB?

• The drop in German inflation cements the outlook for a below-consensus EZ inflation report today.
• Why wouldn’t the ECB cut this month if inflation hit 2.2% in March? We can’t see why not either.
• Weakness in France and Germany is still holding back momentum in EZ manufacturing.

Melanie Debono (Senior Eurozone Economist)Eurozone

EZ Datanote: Money Supply, EZ, Feb; ISTAT Confidence, Italy, Mar & Unemployment, Germany, Mar

In one line:  Improvement in money supply continues; Italian business confidence rises & German unemployment will climb further. 

Melanie Debono (Senior Eurozone Economist)Eurozone

EZ Datanote: Retail Sales, Germany, February 2024

In one line: Ouch.

Claus Vistesen (Chief Eurozone Economist)Eurozone

EZ Datanote: ESI, EZ, March 2024

In one line: Consistent with a rise in EZ GDP this quarter.

Melanie Debono (Senior Eurozone Economist)Eurozone