In one line: German industry likely had a great Q1, but what awaits in Q2?
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: Not enough to salvage Q1, but the 3m/3m trend is turning up.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: Growth and the surveys were picking up, before Mr. Trump’s tariff hammer.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- Look through the noise to see a relatively modest US tariff package for the EU, all things considered.
- An ECB rate cut later this month is now fully priced in, but we still think the Bank will hold fire.
- The SNB can hold off from further rate cuts for now, despite the likely hit to growth from the US tariff hike.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: Soft enough for an April cut? We don’t think so.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- The euro area economy comes into ‘Liberation Day’ in a relatively good position.
- A 25% blanket tariff on EZ exports to the US would bring down our 2025 growth forecast by 0.4pp.
- EU retaliation could raise EZ core goods inflation, but it depends on the size and scope of import tariffs.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- We still think the data support the idea of an ECB pause in April, but what will happen on tariffs today?
- EZ core inflation fell nicely in March, but it will snap back in April as Easter effects reverse.
- Services activity in Switzerland is coming off the boil at the start of the year.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: We now see the March EZ HICP up by 0.7% m/m, and by 2.2% y/y.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- We think EZ headline and core inflation fell by 0.1pp in March, to 2.2% and 2.5% respectively.
- Easter effects depressed German services inflation in March, but core goods inflation in Italy jumped.
- German retail sales were stronger at the start of 2025 than we expected; upside risk to Q1 growth?
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: Headline in line with consensus; core looks strong considering Easter effects.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: Great, but leading indicators point to a slowdown.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: Election result does little to lift household sentiment.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- French and Spanish inflation came in weaker than expected in March, and German joblessness rose...
- ...But consumer inflation expectations and selling price expectations are up and money supply firmed.
- The April decision by the ECB is now finely poised; a dovish March HICP could swing it for the doves.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: Overall confidence is improving, but still subdued.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- The jump in investor sentiment points to a higher EZ Composite PMI in March.
- Current account data suggest services trade may be a drag on EZ GDP in Q1; inventories may offset it.
- The INSEE survey shows improving, but still subdued, business confidence in France.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: Construction kept going at the start of 2025.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- Headline inflation in the Eurozone fell to 2.3% in February, which is as good as it will get this year.
- Non-energy goods is a wild card for inflation in March; base effects point to a big jump.
- A blanket and sustained EU retaliatory tariff would lift inflation, but we doubt this is on the cards.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: Up and away; let’s hope the fiscal stimulus package passes today.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- Germany needs a budget deficit of 4% of GDP over three years to lift defence spending quickly to 3.5%.
- Defence and infrastructure spending require more Bunds; €100B per year over the next decade?
- Rising uncertainty will weigh on Bund yields in Q2, but they’re right to fear the new fiscal plans.
Claus Vistesen (Chief Eurozone Economist)Eurozone
