In one line: Still consistent with our EZ call; all eyes on Germany later.
Melanie Debono (Senior Eurozone Economist)Eurozone
In one line: Where was the German consumer last quarter?
Melanie Debono (Senior Eurozone Economist)Eurozone
- EZ inflation likely fell by 0.2pp in January, to 2.7%, with the core rate down 0.3pp, to 3.1%.
- The ECB remains on track to downgrade its 2024 inflation forecasts in March, by a lot.
- German retail sales plunged, again, in Q4; the fall in jobless claims in January is likely a blip.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: The EZ skirts a technical recession, again.
Melanie Debono (Senior Eurozone Economist)Eurozone
In one line: Better than expected but was it enough to prevent a decline in EZ GDP?
Melanie Debono (Senior Eurozone Economist)Eurozone
In one line: French GDP went nowhere in H2 last year.
Melanie Debono (Senior Eurozone Economist)Eurozone
- Advance GDP data show the EZ economy barely budged last year.
- Spanish inflation rose in January; we see no reason to alter our French and German calls in response...
- ...But we are revising up our EZ inflation forecast by 0.1pp to 2.4%.
Melanie Debono (Senior Eurozone Economist)Eurozone
- This week’s January inflation data will be key for the ECB’s decisions and communication in H1 2024.
- We look for a downside surprise in the EZ, but the January report is a wildcard; anything can happen.
- EZ GDP likely fell in Q4—confirming a recession— worse than the ECB predicted in December.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: Rebound in inflation and higher taxes hit confidence.
Melanie Debono (Senior Eurozone Economist)Eurozone
- Money data, adjusted for savings, suggest a Q1 recovery in EZ GDP is still on the cards...
- ...Growth in bank lending, however, suggests the recovery will be tepid, at best.
- Consumer confidence figures imply the same, as German sentiment is hurt by higher taxes.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: Pointing to downside risks to our rebound call.
Melanie Debono (Senior Eurozone Economist)Eurozone
- The ECB left all its policy settings unchanged yesterday, as everyone expected it to.
- President Lagarde stuck to the line that a spring rate cut is unlikely but didn’t explicitly push back on it...
- ...Data next week will, we think, give the Bank the confidence it needs to cut rates first in March.
Claus Vistesen (Chief Eurozone Economist)Eurozone
THE ECB IS DONE HIKING; WHEN WILL IT CUT?
- ...WE THINK EASING WILL BEGIN IN MARCH
Claus Vistesen (Chief Eurozone Economist)Eurozone