In one line: Stubborn domestic inflation means headline held steady.
Melanie Debono (Senior Eurozone Economist)Eurozone
- Swiss inflation held steady in July, but this means it was still in line with the SNB’s target.
- The headline inflation rate will creep lower in the coming months, allowing for further easing.
- EZ industry ended Q2 on a good note, enough to escape recession last quarter and boost GDP.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: We think the manufacturing PMI is too downbeat, even after the upward revision.
Melanie Debono (Senior Eurozone Economist)Eurozone
In one line: Blame Italy for the upside surprise.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- Eurozone unemployment rose slightly in June, but the underlying trend is still flat.
- Surveys point to downside risks to employment growth and upside risks to unemployment in H2…
- …Yet our own GDP growth forecasts point to a better near-term outlook.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: Further increases in jobless claims are on the horizon.
Melanie Debono (Senior Eurozone Economist)Eurozone
In one line: Higher, but core inflation fell back.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: A smaller q/q increase than we thought.
Melanie Debono (Senior Eurozone Economist)Eurozone
In one line: Continuing to outperform; inflation fell further than expected in July.
Melanie Debono (Senior Eurozone Economist)Eurozone
- Inflation was slightly hotter than we expected in July but is still on track for a sharp fall in August.
- Disinflation in core goods and food will reverse soon, creating a challenge for the ECB in Q4.
- We still see an ECB rate cut in September, but no longer in December; we now have two cuts in H1-25.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: The trend in GDP growth is still around zero; core inflation fell further in July.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: Decent, but the details point to soft domestic demand.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- Germany was a laggard in Q2, again; GDP jumped in Spain, and rose solidly in Italy and France.
- We think the Q2 GDP numbers have increased the probability of a second ECB rate cut in September.
- German HICP inflation was hot, but Spain’s was soft; we still see EZ inflation stable at 2.5% in July.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- The ECB’s CES suggests young people’s inflation expectations have increased since the pandemic…
- …This, in turn, implies that tail-risks for inflation have shifted to the upside, and above 2%.
- Relative inflation expectations for women and low-income workers seem correlated with wage growth.
Claus Vistesen (Chief Eurozone Economist)Eurozone
EZ LEADING INDICATORS ARE THROWING OFF MIXED SIGNALS
- ...WHICH ONES SHOULD YOU TRUST?
Claus Vistesen (Chief Eurozone Economist)Eurozone
- Brace for the Q2 GDP data and July inflation figures, after a busy week for surveys last week.
- EZ headline inflation likely was unchanged in July, but we think core inflation dipped further.
- Italy’s first survey data for July were not as downbeat as those for France and Germany.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: Edging down, in line with deteriorating overall business sentiment in France and Germany
Melanie Debono (Senior Eurozone Economist)Eurozone
In one line: Stable, but unemployment fears are creeping higher.
Claus Vistesen (Chief Eurozone Economist)Eurozone
