In one line: Boosted by investment and consumption.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- A sustained 50% tariff on EU exports to the US would send the EZ economy into recession.
- The route to an EU-US trade deal is relatively easy, but the EU will respond in kind to US tariff threats.
- The German economy was in rude health in Q1, but trade uncertainty will now weigh on growth.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- The EC’s new economic forecasts see a ‘Goldilocks’ boom next year; the economy won’t be that lucky.
- We see stronger growth in Germany than the EC next year, but weaker in France and Spain.
- The EC’s forecast for EZ inflation in 2026, at 1.7%, rests on too dovish energy and core goods forecasts.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- EZ construction output is slowing after a strong finish to 2024, but leading indicators are improving.
- The EZ current account surplus soared in March, reflecting tariff front-running in goods.
- Portfolio outflows fell sharply in March, and likely crashed outright in April.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: Headed for 2% over the summer; enough for two more ECB cuts?
Claus Vistesen (Chief Eurozone Economist)Eurozone
- EZ headline inflation is about to fall to 2%, helping to get further ECB easing over the line, but how much?
- Survey data continue to signal significant upside risk to food inflation; energy inflation will rebound too.
- Services inflation will drop sharply in May but is set to be sticky around 3%.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- We look for broad-based strength in the surveys for May, but we think it will be temporary.
- The Eurozone’s trade surplus soared in Q1, boosted by tariff front-running in pharmaceuticals.
- The EZ runs a deficit with the US in services, but a surplus if intellectual property is excluded.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: The core remains soft, but surveys point to upside risks.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- Front-loaded fiscal stimulus can add 0.5pp to German growth this year, in the best-case scenario.
- Defence spending is poised to accelerate after a slow start to the year, but the multiplier is low.
- Front-loading of infrastructure spending via €100B in funding for local government is a key upside risk.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- A temporary reprieve in the US–China trade war is worth far less than financial markets are assuming.
- Early signs suggest Mr. Trump will go hard on the EU, keeping uncertainty for the EZ economy elevated.
- Isabel Schnabel is coming out swinging for ECB hawks, but will her argument carry the day?
Claus Vistesen (Chief Eurozone Economist)Eurozone
- The EU’s announcement of retaliation against US tariffs is an attempt to get Washington to the table.
- Brussels’ WTO case against the US indicates that it won’t accept 10% as a floor for tariffs.
- EU purchases of energy, agricultural products and defence goods are the clearest route to a deal.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: Soaring; Q1 GDP growth on track for an upward revision.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- Swiss inflation fell to a lower-than-expected zero in April, with a knock-on effect on our forecasts…
- ...We now see deflation until mid-2026; the SNB will cut its policy rate below zero in June in response.
- We look for a 50bp rate cut at the next meeting, taking the key policy rate to -0.25%.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: Germany CPI looks softer than we anticipated, but core inflation rose.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: Supporting our above-consensus EZ call.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: Growth slowed in Q1 after a strong H2-24.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: Barely growing, and trade uncertainty could well keep it that way in 2025.
Claus Vistesen (Chief Eurozone Economist)Eurozone
