Eurozone Publications
Below is a list of our Eurozone Publications for the last 5 months. If you are looking for reports older than 5 months please email info@pantheonmacro.com, or contact your account rep
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Emerging Asia Daily Monitor Global Chartbook
LITTLE IN THE DATA TO SUPPORT AN INSURANCE RATE CUT...
- German Q3 growth was hit by falling consumption, but the spending details are better than the headline.
- Investment in Germany is stabilising, but we’re yet to see evidence of the much hoped-for recovery.
- Jump in government spending was mainly due to welfare spending, but borrowing is rising fast.
- We think this week’s inflation data for November will continue to signal Eurozone inflation above 2% in Q4.
- The acceleration in money supply growth is easing, but it still indicates decent GDP growth.
- Early Q4 spending data are mixed: we see strength in France and Spain, softness in Germany.
- The EZ current account surplus rose marginally in September; a strong euro will bring it down in 2026.
- Foreign investors have moved away from EZ debt and piled into EZ equities over the past year.
- EZ construction output was flat in Q3, after declining in the previous quarter; Q4 will likely be a little better.
- EZ inflation edged down in October, but we still see a near-term rebound to 2.2%, before a fall in January.
- Refining margins are rising, boosting energy inflation, but the trend is still dovish overall.
- Core inflation is set for a small further rise in the near term, before a steady decline over H1 2026.
- Germany’s government will use fiscal policy to lower prices for consumers and firms next year.
- A subsidy to lower electricity prices for energy- intensive industry should lift output in early 2026.
- Germany is set to spend 0.3-to-0.4% of GDP on lower energy prices for consumers and firms.
- Swiss GDP fell in Q3, by 0.5% on the quarter, more than reversing the 0.2% increase in Q2.
- We no longer forecast a recession in H2, as US trade tariffs are now being lowered to 15% from 39%.
- Risks are to the downside, but we still doubt that the SNB will ease policy in December.
- EZ industrial production had a neutral impact on EZ GDP in Q3, if you believe Eurostat’s figures.
- Construction, meanwhile, is set to have been a drag, while services pulled GDP up by 0.2%.
- Surveys point to a jump in services output ahead, but meagre moves in construction and industry.
- ECB doves hoping for help from the euro to pull a December cut over the line will be disappointed…
- ...We expect a further softening in the euro to 1.15 by year-end, before a slight pick-up next year, to 1.17.
- Spanish and Italian surveys for early Q4 are too upbeat, in our view.
- The ECB is lining up a change in key personnel, but the key transitions are back-loaded to 2027.
- Isabel Schnabel’s departure will almost certainly result in a dovish tilt to the ECB’s communication.
- Investor sentiment has fallen marginally in November but still signals a solid composite PMI.
- A Q4 supply crunch in EZ auto production is averted, but the Nexperia controversy could flare up again.
- EZ auto production fell sharply in Q3, but leading indicators are improving in Germany.
- Auto sales in the EZ slowed in Q3, and leading indicators point to continued sluggish growth in Q4.
- EZ retail spending growth slowed to 0.2% quarter-on-quarter in Q3, from 0.8% in Q2….
- ....but overall consumption growth likely was decent, and we look for more of the same in Q4.
- Rebound in German manufacturing was tepid in September, but output likely rose again in October.
- German factory orders rebounded in September, but the underlying trend in growth is still flat.
- Sales data signal downside risk to German industrial output, but they failed to capture the August plunge.
- Manufacturing in France is soaring, helped by aerospace, but surveys warn of a fall in early Q4.
HOPES OF A Q4 RATE CUT DRIFTING OUT OF REACH
- …AS GROWTH AND INFLATION OVERSHOOT ECB EXPECTATIONS
- We’re changing our inflation forecast methodology to a pure bottom-up model, based on the four majors.
- We will now be forecasting 38 individual HICP and CPI components every month.
- Our forecast for core inflation to settle above 2% is underpinned by dovish monthly pricing trends.
- Swiss inflation eased to within touching distance of 0%, the bottom of the SNB’s inflation target range.
- We look for further declines, in contrast to the SNB’s forecast for inflation to rise.
- Still, the SNB will hold off from further easing this year and probably also next year.
- The ECB took a breather in Florence; no change in policy and little in the way of guidance.
- Inflation in Spain and Germany, and our forecasts for Italy and France, signal EZ inflation at 2.2% today.
- EZ GDP rose by 0.2% quarter-to-quarter in Q3, breezing past the ECB’s September forecast.
- The ECB BLS showed banks tightened lending standards in Q3, boding ill for capex and spending…
- ...But these downbeat messages can safely be ignored, given other survey data.
- The first business survey for Italy for October suggests growth there is picking up, as in Germany.
- Lending to the private sector is slowing at the margin but underlying momentum remains solid…
- ...Our measure of the credit impulse points to EZ GDP growth of around 0.5% q/q in Q4.
- Germany’s IFO survey adds to the message from the PMI that a rebound there will lead the way in Q4.
- Inflation data clearly suggest the ECB is now on hold, but other data have tilted dovishly recently.
- A delay to the implementation of ETS2 could be exactly what ECB doves need for a rate cut in Q4…
- …But our forecasts still imply that the Bank will need to lift its core inflation outlook, precluding a cut.
