EZ Datanote: Industrial Production, Spain, February 2024

In one line: Industry is a key reason Spain outperformed in Q1.

Melanie Debono (Senior Eurozone Economist)Eurozone

EZ Datanote: Inflation, Switzerland, March 2024

In one line: A downside surprise, as in the EZ.

Melanie Debono (Senior Eurozone Economist)Eurozone

5 April 2024 Eurozone Monitor Swiss CPI implies more SNB cuts; EZ house prices fell in Q4

• The fall in Swiss inflation in March solidifies our view that more SNB rate cuts are on the way this year.
• EZ house prices fell in Q4 and were down by 1.1% in 2023 overall; we look for another 1% drop this year.
• The PMI adds to the evidence that Spain’s economic outperformance continued in Q1; we concur.

Melanie Debono (Senior Eurozone Economist)Eurozone

EZ Datanote: Unemployment, Eurozone, February 2024

In one line: Staying where it's been for most of the past year.

Melanie Debono (Senior Eurozone Economist)Eurozone

EZ Datanote: Final Manufacturing PMI, EZ, March 2024

In one line: Still touch and go for the recovery in EZ industry.

Melanie Debono (Senior Eurozone Economist)Eurozone

3 April 2024 Eurozone Monitor EZ inflation likely fell to just over 2% in March; what now, ECB?

• The drop in German inflation cements the outlook for a below-consensus EZ inflation report today.
• Why wouldn’t the ECB cut this month if inflation hit 2.2% in March? We can’t see why not either.
• Weakness in France and Germany is still holding back momentum in EZ manufacturing.

Melanie Debono (Senior Eurozone Economist)Eurozone

EZ Datanote: Money Supply, EZ, Feb; ISTAT Confidence, Italy, Mar & Unemployment, Germany, Mar

In one line:  Improvement in money supply continues; Italian business confidence rises & German unemployment will climb further. 

Melanie Debono (Senior Eurozone Economist)Eurozone

EZ Datanote: ESI, EZ, March 2024

In one line: Consistent with a rise in EZ GDP this quarter.

Melanie Debono (Senior Eurozone Economist)Eurozone

28 March 2024 Eurozone Monitor EZ CPI unlikely to have risen as much as Spanish CPI in March

• Spanish inflation rose 0.4pp to 3.2% in March, less than we expected...
• ...We are revising down our forecast for the Eurozone headline; it likely rose just 0.1pp to 2.7% in March.
• Spanish CPI is further along than the EZ headline, suggesting EZ inflation will rise further before it falls.

Melanie Debono (Senior Eurozone Economist)Eurozone

EZ Datanote: GfK Consumer Confidence, Germany, April

In one line: Pointing to a recovery in consumption, albeit a tepid one.

Melanie Debono (Senior Eurozone Economist)Eurozone

26 March 2024 Eurozone Monitor How will the ECB deal with inflationary fiscal tightening?

• The ECB faces a unique challenge in thinking about fiscal policy; fiscal tightening is now lifting inflation.
• We estimate that the unwinding of fiscal stimulus is now boosting EZ headline inflation by 0.4pp...
• ...In a fight for every percentage point to get inflation to target, this could prevent ECB rate cuts.

Melanie Debono (Senior Eurozone Economist)Eurozone

25 March 2024 Eurozone Monitor Eurozone survey data slowly but surely rebounding

• The Eurozone PMIs suggest services activity is now rebounding; the outlook for Q2 is brightening.
• Germany and France are holding the EZ economy back; Southern Europe is doing the heavy lifting.
• We still see the euro area economy returning to growth in Q1, with a 0.2% increase in GDP.

Samuel TombsEurozone

22 March 2024 Eurozone Monitor SNB steps into spring with a policy rate cut

• The SNB cut interest rates, beating other major DM central banks to the punch on easing policy. 
• More easing is likely over the coming year; we look for 75bp of further cuts by December. 
• The risks are to fewer cuts; the SNB sees inflation in line with its price-stability mandate out to 2026.

Melanie Debono (Senior Eurozone Economist)Eurozone

EZ Datanote: Advance Consumer Confidence, Eurozone, March 2024

In one line: A sign of more to come.

Melanie Debono (Senior Eurozone Economist)Eurozone

EZ Datanote: Industrial Production, Italy, January 2024

In one line: Recovery in Italian industry is delayed.

Melanie Debono (Senior Eurozone Economist)Eurozone

21 March 2024 Eurozone Monitor Plenty of reasons for an SNB rate cut today, but we think it will hold

• It’s a close call, but we think the SNB will hold fire at today’s meeting and first cut in June instead.
• Risks are tilted towards a rate cut today; markets are pricing in 40% probability of a move.
• mItalian industrial production started the year on a weak footing, but EZ construction is holding up.

Melanie Debono (Senior Eurozone Economist)Eurozone

20 March 2024 Eurozone Monitor Slowing EZ labout cost growth supports ECB easing to start soon

• Hourly labour cost growth took a leg down in Q4, in line with other wage growth measures.
• Leading indicators suggest pay growth is easing again in Q1; we look for it to fall throughout 2024.
• The ECB can’t afford to wait for the all clear from wage negotiations to start easing policy.

Melanie Debono (Senior Eurozone Economist)Eurozone

EZ Datanote: Detailed Inflation, Eurozone, February 2024

In one line: Next couple of months’ data will be more noise than signal.

Melanie Debono (Senior Eurozone Economist)Eurozone

18 March 2024 Eurozone Monitor EURUSD to rise further this year; Spain budget delay no big deal

• Interest-rate and core-inflation differentials still point to upside risks for EURUSD.
• We continue to believe EURUSD is good value below 1.10; a rise to 1.15 should be possible.
• Spain will continue to outperform despite the government ditching its attempt to set a budget.

Melanie Debono (Senior Eurozone Economist)Eurozone