In one line: As expected; plenty to talk about on the press conference.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- The ECB cut by 25bp as expected; an October cut is now a tall order, but a December cut is back on.
- The rise in the ECB’s core inflation forecast will prevent the Bank from being mugged by reality in Q4.
- Early signs show that the ECB is noticing the sustained weakness in EZ domestic demand.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- Germany’s economy is now in recession, judging by the trend in investment and survey data…
- …But we think rising consumers’ spending will just about keep the economy’s head above water in Q3.
- We’re lowering our German GDP growth forecasts for Q3, Q4 and Q1 by a cumulative 0.3pp.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: A hefty fall; set for a sixth quarter-on-quarter decline.
Melanie Debono (Senior Eurozone Economist)Eurozone
In one line: Dovish, but upside risks loom in Q4.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- Italian industry remains in recession in Q3, in line with its German counterpart…
- ...Spanish industry is now joining the recession party, though it is still faring better than elsewhere.
- The outlook for EZ industry remains bleak, especially given signs of still-weak import demand from China.
Melanie Debono (Senior Eurozone Economist)Eurozone
- The ECB will cut its policy rate by 25bp this week, as widely expected, but what happens in Q4?
- We see a higher chance than markets of an October cut, and a lower probability of December easing.
- Will the ECB lift its Q4 core inflation forecasts this week? We think so, but how far?
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: Held back by deteriorating views on Germany.
Melanie Debono (Senior Eurozone Economist)Eurozone
In one line: Revised down; held back by consumption and investment.
Melanie Debono (Senior Eurozone Economist)Eurozone
In one line: Industry is unlikely to recover until the external picture improves.
Melanie Debono (Senior Eurozone Economist)Eurozone
- EZ GDP rose less than expected in Q2, mainly due to downward revisions to French and Irish GDP.
- Consumption and investment held back growth, while net trade did all the heavy lifting.
- Compensation-per-employee growth eased, in line with other measures of wage growth.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- July’s German factory orders increase was driven by major orders; jump in June’s core orders was a blip.
- German industrial turnover figures point to output data today coming in well below consensus.
- EZ retail sales are still being compiled without German figures and cannot be relied upon.
Melanie Debono (Senior Eurozone Economist)Eurozone
In one line: Likely too downbeat; still no German data.
Melanie Debono (Senior Eurozone Economist)Eurozone
- France’s budget deficit won’t shrink much this year, but tough negotiations on the 2025 budget loom.
- September is a key month for budget negotiations; a hung parliament points to high risk of a stalemate.
- The composite PMIs for Spain and Italy, despite rising in August, point to slower GDP growth in Q3.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: GDP growth is unlikely to slow in Q3, as the PMI suggests.
Melanie Debono (Senior Eurozone Economist)Eurozone
- Net trade drove the increase in Swiss GDP in Q2, while investment held it back.
- Growth will slow in Q3 but pick up again in Q4, such that GDP rises by 1.2% in 2024 the same as in 2023.
- Inflation was a touch higher than we expected in August, but the SNB will still cut twice more this year.
Melanie Debono (Senior Eurozone Economist)Eurozone
