- Banks tightened lending standards less in Q1 than in Q4, but were already worried about tariffs in March…
- ...They expect to tighten lending standards further, while demand for loans among firms fell.
- We revise up our Swiss GDP forecasts, on the back of the 90-day pause to tariff hikes.
Melanie Debono (Senior Eurozone Economist)Eurozone
- Re-routing could lead to a bigger EZ trade surplus with the US, increasing the risk of higher US tariffs…
- ...One of the ways to stem the flow would be for the EU to hike its tariffs on China; it prefers not to.
- The EU is at great risk of being pulled into the US-Sino trade war, whether it wants to or not.
Melanie Debono (Senior Eurozone Economist)Eurozone
In one line: Industry still supported Italian GDP in Q1.
Melanie Debono (Senior Eurozone Economist)Eurozone
- Slower growth, coupled with a stronger CHF and lower oil prices, will keep Swiss inflation down.
- The SNB is likely to cut once more; we now expect the easing cycle to end in June.
- EZ house prices rose 4.2% last year and will increase again this year, as lower interest rates fuel demand.
Melanie Debono (Senior Eurozone Economist)Eurozone
In one line: Rebounding as expected; will global trade war hurt consumers?
Melanie Debono (Senior Eurozone Economist)Eurozone
In one line: Up despite being held back by German weakness.
Melanie Debono (Senior Eurozone Economist)Eurozone
- The markets’ verdict is clear; trade uncertainty is a disinflationary shock, but we’re not convinced.
- We now think the ECB will cut its policy rate later this month, by 25bp, for a terminal rate of 2.25%.
- A high export ratio for EZ industry means higher US tariffs are a risk; construction is looking better.
Melanie Debono (Senior Eurozone Economist)Eurozone
In one line: Holding at a 46-month low, but will rise again soon; Swiss retaliation to US tariff hikes poses an upside risk.
Melanie Debono (Senior Eurozone Economist)Eurozone
In one line: A new record low; another data point for ECB hawks.
Melanie Debono (Senior Eurozone Economist)Eurozone
In one line: Our PM composite PMI points to another solid increase in GDP in Q1.
Melanie Debono (Senior Eurozone Economist)Eurozone
In one line: Still averaged higher in Q1 than Q4.
Melanie Debono (Senior Eurozone Economist)Eurozone
In one line: EZ inflation expectations hold steady; further increases in German unemployment are on the way.
Melanie Debono (Senior Eurozone Economist)Eurozone
In one line: Inflation in France and Spain came in below expectations; another setback in French spending.
Melanie Debono (Senior Eurozone Economist)Eurozone
In one line: Money and credit data still positive on outlook for EZ economy.
Melanie Debono (Senior Eurozone Economist)Eurozone
In one line: Back up, but increase in Q1 will be smaller than in Q4.
Melanie Debono (Senior Eurozone Economist)Eurozone
THE ECB HAS ONLY ONE MORE CUT IN IT...
- ...ASSUMING JUST SMALL US TRADE-TARIFF INCREASES
Melanie Debono (Senior Eurozone Economist)Eurozone
- The US confirmed its wish to raise tariffs on imports of EU cars next week; car parts will also be included.
- These hikes, touted in February, are “baked in the cake” for our Q2 GDP baseline; the hit will be small.
- Money and credit data are improving and continue to point to faster EZ GDP growth.
Melanie Debono (Senior Eurozone Economist)Eurozone
