In one line: Politics still holding back consumer confidence.
Melanie Debono (Senior Eurozone Economist)Eurozone
ECB HAS FURTHER ROOM TO EASE POLICY...
...BUT WE ARE CLOSER TO NEUTRAL THAN MARKETS BELIEVE
Melanie Debono (Senior Eurozone Economist)Eurozone
- Political uncertainty weighed on business sentiment in France in December…
- ...Politically-driven sentiment moves don’t usually translate into hard data, but growth will still slow.
- Services trade figures in the EZ current account point to downside risk to our EZ net trade call in Q4.
Melanie Debono (Senior Eurozone Economist)Eurozone
- EZ inflation rose less than previously thought in November, to 2.2%—rather than 2.3%—from 2.0%.
- It will increase further in December, and risks to our call for a 2.5% print are to the upside.
- The headline will fall in early 2025, allowing the ECB to cut rates further, less than markets expect though.
Melanie Debono (Senior Eurozone Economist)Eurozone
In one line: Construction escaped recession in Q4.
Melanie Debono (Senior Eurozone Economist)Eurozone
In one line: EZ inflation rose less than previously thought in November; another rise this month is likely.
Melanie Debono (Senior Eurozone Economist)Eurozone
- The IFO BCI sank in December, pointing to downside risk to our call for German GDP to stagnate in Q4.
- Investor sentiment, measured by the ZEW, perked up, in line with rising equities.
- EZ trade took a hit in October; front-loading ahead of higher tariffs will prevent a Q4 drag from net trade.
Melanie Debono (Senior Eurozone Economist)Eurozone
In one line: German investor sentiment recovers; EZ goods trade takes a hit in October.
Melanie Debono (Senior Eurozone Economist)Eurozone
In one line: Sinking to its lowest since May 2020, and the first Covid lockdowns.
Melanie Debono (Senior Eurozone Economist)Eurozone
- The PMIs in December were still a dovish signal for ECB policymakers…
- ...and the ECB President made it clear further easing was on the way in her speech in Lithuania…
- ...But she failed in her promise to clarify the Bank’s level of restrictiveness.
Melanie Debono (Senior Eurozone Economist)Eurozone
In one line: Growth will still slow, despite increase in PMI in December; rising price indices still point to downside risks for inflation.
Melanie Debono (Senior Eurozone Economist)Eurozone
In one line: Still no sign of a pick up in new orders in manufacturing.
Melanie Debono (Senior Eurozone Economist)Eurozone
In one line: The recession in industry continued in Q4.
Melanie Debono (Senior Eurozone Economist)Eurozone
In one line: Martin Schlegel comes out swinging with jumbo cut at his first meeting as SNB Chairman.
Melanie Debono (Senior Eurozone Economist)Eurozone
- Strong employment growth and a falling saving rate helped Spain outperform in 2024...
- ...These will be the reasons why Spanish GDP growth outpaces the rest of the big four again in 2025.
- Key risks to the outlook include political uncertainty and the crackdown on tourist appartments.
Melanie Debono (Senior Eurozone Economist)Eurozone
In one line: The near-two-year-long recession in Italian industry is not over yet.
Melanie Debono (Senior Eurozone Economist)Eurozone
In one line: Services inflation will bring the headline down soon, but another increase in December is a decent bet.
Melanie Debono (Senior Eurozone Economist)Eurozone
In one line: Politics weigh on investor sentiment at year end.
Melanie Debono (Senior Eurozone Economist)Eurozone
