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
In one line: Easing back; unemployment fears still high.
Melanie Debono (Senior Eurozone Economist)Eurozone
In one line: Election result and fiscal stimulus boost sentiment.
Melanie Debono (Senior Eurozone Economist)Eurozone
- The EUR has risen against the USD ever since the EU and German fiscal announcements in March.
- Fundamentals, such as interest rate differentials, point to further strength ahead.
- We look for EURUSD to reach 1.10 at end-2025, and 1.15 at end-2026.
Melanie Debono (Senior Eurozone Economist)Eurozone
- Germany’s IFO business climate index rose in March, mirroring the jump in the PMI…
- ...The surveys still point to recession risk in Q1, after the GDP fall in Q4; we doubt that will be the case…
- ...The surveys have underestimated GDP growth in recent quarters, and are likely doing so again in Q1.
Melanie Debono (Senior Eurozone Economist)Eurozone
In one line: Up thanks to rebound in German manufacturing.
Melanie Debono (Senior Eurozone Economist)Eurozone
