- In one line: The end of September rate cut hopes.
Claus Vistesen (Chief Eurozone Economist)Global
In one line: The end of September rate cut hopes.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- The number of people out of work dropped by the most in over three years in July…
- ...As a result, the EZ unemployment rate fell to 6.2% in July and is likely to have held steady in August.
- Labour-market data provide little ammunition for ECB doves in their fight for another rate cut.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- It’s a coin toss between EZ headline inflation at 2.1% or 2.0% in August, but what happened in the core?
- Early consumers’ spending data for July point to downside risks to growth in Q3.
- Germany’s labour market seems to be turning a corner, and ECB inflation expectations are elevated.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: Unwelcome rise in services selling price expectations.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: Steady, and solid, growth in EZ money supply.
Claus Vistesen (Chief Eurozone Economist)Eurozone
EZ ECONOMY SLOWS AS TARIFF HIKES START TO BITE…
- …BUT OUR CALL FOR A SEPTEMBER RATE CUT IS NOW ON LIFE SUPPORT
Claus Vistesen (Chief Eurozone Economist)Eurozone
- The acceleration in money supply growth has faded, but it still signals solid underlying GDP growth.
- Surveyed EC selling price expectations rose in services but fell further in food.
- The Swiss economy came down to Earth in Q2 amid wild swings in net trade and inventories.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- GfK consumer confidence in Germany sank in September, but income expectations still look fine.
- All eyes on core inflation in France and Spain for signs of a downside surprise for the EZ print.
- Unemployment in Germany likely rose in August, but the IAB survey points to better times ahead.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: Grim, and little scope for near-term improvement.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- Our call for a September rate cut is hanging on by the skin of its teeth; can the August HICP save it?
- We doubt ECB doves will be able to push through easing in Q4 if the Bank stands pat next month.
- The game of chicken in French politics continues, with Mr. Bayrou’s government on the brink.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- German GDP fell by more than initially estimated in Q2, stung by falling investment and net trade.
- We still see inventories weighing on growth in H2, but a fall in imports is an upside risk for net trade.
- Look through the noise in EZ wage growth data for a trend of 2.5-to-3.0% year-over-year.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- EZ PPI inflation, ex-services, is stabilising just below 1%, but divergence among sectors is high.
- The trend in global energy prices points to continued deflation in EZ energy producer prices…
- …But food producer price inflation is sticky, signalling upside risk to consumer prices in this category.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- The shape of the Phillips curve is unstable over time, but its shifts are difficult to pin down with data.
- Data point to a flat PC in the EZ, and a high sacrifice ratio for the ECB, but only for demand-pull inflation.
- Our estimates of the NKPC support our broader call that EZ inflation will ultimately settle above 2%.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- National data for Q2 suggest a rise in EZ negotiated wage growth after a plunge in Q1.
- Early data for Q3 are mixed, but stable inflation points to wage growth holding broadly steady ahead.
- Falling Irish and German industrial production mean EZ industry had a difficult end to Q2.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: Industrial output will be revised up; net trade was a drag on GDP growth in Q2.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- Industrial production in Germany plunged in June, or did it? We are not so sure.
- Green shoots in leading indicators for German capex, but an inventory overhang still looms in H2.
- German exports remain stuck in the mud, and US tariffs add further downside risk in H2.
Claus Vistesen (Chief Eurozone Economist)Eurozone
