- GDP in France likely fell slightly in Q4, and we doubt that Q1 will deliver a strong rebound…
- …But we’re still betting that solid real income growth will support stronger GDP growth from Q2.
- We now forecast 2025 GDP growth in France of 0.8%, marginally higher than the consensus.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: Disappointing, but still consistent with a rise in Q4.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: Hit by declines in Germany and France; services are still holding up overall.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- Bunds now align with our 2025 forecasts, but they’ve likely come a little too far, too fast.
- The balance of risks for German Q4 GDP has shifted to the upside, but we still see zero growth.
- A fall in inventories is the key risk to Germany’s Q4 GDP print, offsetting a further rise in consumption.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: Look beyond the headlines for a slightly better story.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: ECB doves were saved by France and Italy.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- A crash in major orders pushed German factory orders down in November; surveys remain poor.
- The upturn in German retail sales in Q4 is on track, despite soft data for October and November.
- French consumers’ unemployment fears are soaring, warning of a further rise in joblessness in Q1.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: Another soft inflation print in France; soft core in Switzerland.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- EZ inflation data are in line with further gradualism from the ECB this month, implying a 25bp cut.
- We still see little chance of either EZ headline or core inflation making a perfect landing at 2%.
- Outright deflation is a remote risk in Switzerland; the SNB will make a final 25bp rate cut in March.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: Hot; EZ inflation to overshoot the consensus tomorrow.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- German inflation overshoots expectations; we now see EZ HICP inflation at 2.6% in December.
- A rebound in services pulled the EZ PMIs higher in December, amid still-depressed manufacturing.
- Seasonals, investor sentiment and firming real M1 growth promise a further rise in the EZ PMI in Q1.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: Relief in the PMIs; investor sentiment and seasonals signal further gains ahead.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: Better than markets expected, but surveys warn of accelerating weakness in Q1.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- German unemployment held steady in December, but surveys warn of further increases in Q1.
- We think EZ HICP inflation rose by 0.3pp in December, to 2.5%, 0.1pp above the consensus.
- The upturn in German retail sales is intact, but manufacturing is still stuck in the mud.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: Sustained weakness in manufacturing; upturn in real M1 growth is accelerating.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- The PMIs suggest manufacturing in the Eurozone remained mired in recession at the end of 2024…
- …But we still hope US tariff front-running will lift the hard data for Q4 and Q1, in time.
- The upturn in real M1 growth continued midway through Q4; ignore this signal at your peril.
Melanie Debono (Senior Eurozone Economist)Eurozone
- Uncertainty over EZ fiscal policy at the start of 2025, but the outlook for monetary policy is clearer.
- Data released over the holidays confirm stellar Q3 GDP growth, and slightly higher inflation, in Spain.
- Early 2025 data to signal still-difficult conditions in industry, but a continued upturn in M1 growth.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: Consumer sentiment takes a hit as the Holidays approach.
Melanie Debono (Senior Eurozone Economist)Eurozone
