- The EZ PMI held steady in June, and averaged broadly the same in Q2 as in Q1…
- ...But EZ GDP will not repeat its 0.6% growth in Q1; we look for GDP to stagnate this quarter.
- Demand is recovering but, once tariff front-running ends, will likely correct; price pressures are easing.
Melanie Debono (Senior Eurozone Economist)Eurozone
In one line: Recovery from March and April’s drops has ended already
Melanie Debono (Senior Eurozone Economist)Eurozone
In one line: We were wrong; SNB opts for another small cut.
Melanie Debono (Senior Eurozone Economist)Global
In one line: We were wrong; SNB opts for another small cut.
Melanie Debono (Senior Eurozone Economist)Eurozone
- The SNB shied away from a jumbo cut, opting for a 25bp reduction for its sixth straight policy rate cut.
- The policy rate is now at zero; we doubt the SNB can avoid negative rates for long…
- ...We now expect another 25bp cut in September but think the SNB will be back hiking next year.
Melanie Debono (Senior Eurozone Economist)Eurozone
In one line: Investor sentiment continues to rise.
Melanie Debono (Senior Eurozone Economist)Eurozone
In one line: Tariff-front running boost to industry and trade fading in early Q2.
Melanie Debono (Senior Eurozone Economist)Eurozone
In one line: Energy and services pull headline down.
Melanie Debono (Senior Eurozone Economist)Eurozone
In one line: Stable, in line with advance release.
Melanie Debono (Senior Eurozone Economist)Eurozone
- Post-meeting comments from ECB Council members are mixed, but do not rule out another cut.
- Markets, like us, look for one more rate cut—in September—but it will be a close call.
- The ECB’s wage tracker eased in Q1, in line with other measures; wage growth will remain high.
Melanie Debono (Senior Eurozone Economist)Eurozone
- Investor sentiment rose in June, signalling a rebound in the EZ composite PMI after two straight declines.
- Advance hard data suggest that GDP growth will slow regardless…
- ...We continue to look for EZ GDP to stagnate this quarter, after the 0.6% q/q rise in Q1.
Melanie Debono (Senior Eurozone Economist)Eurozone
- The BTP-Bund spread has held broadly steady at around 100bp so far this year.
- We still see scope for further narrowing in 2025, to 70bp, implying BTPs trading inside OATs in France.
- Risks are broadly balanced, with German stimulus a downside and further trade uncertainty an upside.
Melanie Debono (Senior Eurozone Economist)Eurozone
- EZ compensation per employee growth slowed in Q1, in line with easing negotiated wage growth.
- Other measures out in the coming days are likely to also show slower wage growth in Q1.
- We suspect wage growth will now plateau in the 2.5%-to-3.0% range, remaining historically high.
Melanie Debono (Senior Eurozone Economist)Eurozone
In one line: Fastest growth in eleven quarters thanks to tariff-front-running-led jump in Irish GDP.
Melanie Debono (Senior Eurozone Economist)Eurozone
In one line: PMI still paints a picture of underlying weakness in construction.
Melanie Debono (Senior Eurozone Economist)Eurozone
