In one line: Few signs of a shift in the guidance on rates, yet. QT will accelerate in H2-24.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- The ECB lowered its inflation forecast in December; they will come down further in March, by a lot.
- Ms. Lagarde pushed back against our forecast for a March cut, but we think she’ll come around.
- The SNB stands pat, but sends a clear signal that it is now done raising rates; will it cut in March?
Claus Vistesen (Chief Eurozone Economist)Eurozone
- German politicians agreed to cut spending to stick to the constitutional debt brake...
- ...But it looks like a stop-gap solution to us, and fractures within the coalition will likely widen from here.
- EU fiscal rules return next year; in what form remains to be seen, but they will be laxer than before.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- German manufacturing faces a host of challenges, but the country isn’t de-industrialising, yet.
- Politics are at odds with economic objectives in Germany; the latter will drive the former, eventually.
- Employment and investment in machinery are the key manufacturing variables to watch in 2024.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: A big decline; base effects in energy point to a snap-back in December.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- The ECB will keep rates and the pace of QT unchanged this week; all eyes on the new forecasts.
- We think the ECB will lower its 2024 inflation forecast by 0.5pp, to 2.7%, and we look for 2.0% in 2026.
- The consensus now expects the first ECB rate cut in June next year; we still believe March is a good bet.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: Hit by falling inventories; productivity fell further.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- EZ GDP growth was stung by falling inventories in Q3, offsetting a rise in public and private spending.
- The slowdown in investment is intensifying, but the outlook for household consumption is brightening.
- We now think EZ GDP will rise by 0.5% this year, and next year too; no upward inflation pressures here.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: Early days, but it looks like a decline in Q4.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- An ECB pivot is underway; it will be confirmed at next week’s policy meeting, and by the new forecasts.
- The January HICP report and wage data remain risks to our call for a first rate cut in March.
- Early data from France and Spain suggest euro area manufacturing slowed further at the start of Q4.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- Swiss inflation fell in November and has now been in line with the SNB’s target for six months...
- ...It will likely slide further in H1 next year, after a probable small base-effects driven rise in December.
- Coupled with weak growth, the stars should align for the SNB to start cutting its key rate by March.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: A modest rise, but still consistent with upside risks for the PMI.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: Net exports in goods seem on track for a rise in Q4.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: Depressed, but the second derivative is turning.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- EZ manufacturing PMIs suggest that industrial production remains on track for a decline in Q4.
- Manufacturing employment is now falling steadily; will it pull the broader labour market down?
- It’s early days, but we’re starting to feel excited about better-looking manufacturing surveys in Q1.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: ECB hawks are about to eat humble pie.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: German unemployment is rising, but employment growth is resilient.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: Downside risks to EZ inflation data.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: A solid start to Q4; a sign of more to come?
Claus Vistesen (Chief Eurozone Economist)Eurozone
