- A trio of strong data tilts the balance of risk further in favour of a 25bp rate cut in December.
- Core inflation was firmer than expected in October, and it will increase a touch in November too.
- The ECB battle over the neutral rate has begun; Ms. Schnabel likely sees a relatively high number.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: Little in the GDP data to support an accelerated ECB easing cycle.
Melanie Debono (Senior Eurozone Economist)Eurozone
In one line: Recession averted (again), labour market weakness continues and upside risks to October inflation.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: Disappointing; was the hit from construction investment bigger than we thought?
Melanie Debono (Senior Eurozone Economist)Eurozone
In one line: Stellar again; inflation increase driven by energy base effects
Melanie Debono (Senior Eurozone Economist)Eurozone
In one line: Decent, but nothing to write home about ex-Olympic boost.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- EZ GDP rose more than we and the ECB had expected in Q3, and growth picked up from Q2.
- France, Spain and Germany all contributed positively, while GDP stagnated in Italy.
- Advance CPI data in Germany and Spain point to upside risks to EZ core inflation today.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- We look for EZ GDP growth at 0.3% quarter-to-quarter in Q3, slightly above the consensus, 0.2%.
- Today’s early-October inflation data in Germany and Spain will point to a rebound in the EZ HICP.
- An upward revision to EZ unemployment is the main dovish risk to rates this week.
Melanie Debono (Senior Eurozone Economist)Eurozone
- Donald Trump has threatened a 10% tariff on goods imported to the US, if he becomes president.
- Our analysis suggests the hit to EZ GDP from a blanket 10% tariff would be limited…
- ...The GDP hit would be smaller if the EU retaliates but bigger if a US-China trade war escalates.
Melanie Debono (Senior Eurozone Economist)Eurozone
In one line: Supporting our view Germany will avoid recession this year but pointing to downside risks in Italy.
Melanie Debono (Senior Eurozone Economist)Eurozone
- Money supply and lending growth picked up further at the end of Q3, a good sign for EZ GDP growth.
- ECB surveyed inflation expectations dropped in September but will likely rebound in Q4.
- The IFO survey in Germany improved marginally in October, but the IESI in Italy stumbled.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: Barely budging fuelling market expectations for faster ECB rate cuts.
Melanie Debono (Senior Eurozone Economist)Eurozone
In one line: Down, in line with our call that French GDP will slow again in Q4 after an Olympics boost in Q3.
Melanie Debono (Senior Eurozone Economist)Eurozone
- The EZ PMI barely budged in October and is consistent with slower GDP growth in Q4…
- ...But we think growth will remain solid despite agreeing with the PMI about a slowdown in France.
- Markets are trying to pull the ECB towards a 50bp rate cut in December; we still see 25bp.
Melanie Debono (Senior Eurozone Economist)Eurozone
