- 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
- Italian industrial output edged up in June, while German turnover figures point to a rise there too.
- EZ industry fared well in Q2, a further correction in Irish production permitting.
- EZ retail sales recorded a decent June and suggest goods spending supported GDP in Q2.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: Soaring as transport and refineries kick into gear
Claus Vistesen (Chief Eurozone Economist)Eurozone
- The EZ PMI was revised down, largely due to a downward revision to France’s already-weak index.
- Spain’s and Italy’s composite PMIs are much higher than those of France and Germany.
- French industrial production soared in June, but mainly on the back of a one-off in transport.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: A blow for ECB doves and September rate cut hopes.
Claus Vistesen (Chief Eurozone Economist)Global
In one line: A blow for ECB doves and September rate cut hopes.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- The July HICP has raised the bar significantly for a September ECB rate cut…
- …But we won’t give up on our call until we see inflation data for August.
- A fall in core inflation, volatile markets, and US economic fragility could still pull a cut over the line.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: EZ inflation in July was not the dovish slam dunk we were expecting.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: No change; we still see the EZ HICP at 1.8% y/y.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: German and Italian GDP both fall by 0.1% q/q; available data now point to 0.1% increase in EZ GDP.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: Solid, but not enough to prevent a poor Q2.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- EZ GDP edged higher in Q2, helped by Portugal, Spain and France; Germany and Italy stumbled.
- We’re slightly more upbeat on investment, but we still see Eurozone exports in goods falling by 1% in H2.
- Inflation in Spain jumped in July, threatening our dovish forecast for the EZ HICP.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: Near-term inflation expectations are easing.
Claus Vistesen (Chief Eurozone Economist)Eurozone
EZ ECONOMY SHOWS RESILIENCE IN THE FACE OF TARIFF THREATS…
- …SUB-2% SUMMER INFLATION WILL GET A SEPTEMBER RATE CUT OVER THE LINE
Claus Vistesen (Chief Eurozone Economist)Eurozone
- The US-EU trade deal is a decent outcome for the EZ economy, but it will sting politically in Brussels.
- A relatively small 1% fall in Irish Q2 GDP points to upside risk to this week’s EZ GDP growth print.
- The probability of a September rate cut will increase this week if our July inflation forecasts prove right.
Claus Vistesen (Chief Eurozone Economist)Eurozone
