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
- The Eurozone economy was stronger in the first quarter than both we and the ECB expected.
- The pick-up in growth will prove short-lived, as trade uncertainty bites down on investment.
- Country data point to EZ inflation at 2.1% in April; we still see a chunky upside surprise in the core.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: EZ inflation expectations jumped on the eve of the tariff shock.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- Spanish growth slowed in Q1 but still comfortably outperformed growth in the rest of the big four.
- The SNB is easing policy without cutting rates, signalling a desire to steer clear of negative rates.
- Money and credit data remain positive on outlook for the EZ economy but tariffs still threaten.
Claus Vistesen (Chief Eurozone Economist)Eurozone
UNCERTAINTY OVER GLOBAL TRADE WILL WEIGH ON GROWTH...
- ...A SHORT TECHNICAL RECESSION IN H2 IS NOW OUR BASELINE
Claus Vistesen (Chief Eurozone Economist)Eurozone
- Market expectations for the ECB’s deposit rate to stay below 2.0% next year are a sitting duck.
- Bunds are fairly valued at 2.5%; fiscal policy poses upside risk, but trade wars pull in the other direction.
- EURUSD is overshooting our models; EZ equities are set to struggle for a while longer.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: French industry intends to make hay while the sun is still shining.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- Our forecasts for Q1 GDP and the April HICP imply upside risk for ECB rate expectations this week.
- Robust national business surveys point to upside risk to our Q2 forecasts for GDP in Germany and France.
- Tariff front-running seems to be just what the doctor ordered for manufacturing in France.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: Resilient, but labour market prospects remain difficult.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- We look for a chunky decline in the April PMIs; falling new orders likely will bear the brunt of the hit.
- The euro’s rise is supported by strong portfolio inflows, which look set to continue in Q2.
- Is euro strength a sign of a more structural shift in FX reserve portfolios? Perhaps, but it’s too soon to say.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- The ECB is making a dovish shift, conditional on a benign tariff outcome for core inflation.
- Energy prices and the euro can be cruel mistresses for policymakers looking for signals on inflation.
- Markets are pricing in the tail-risk for ECB rates; we still think the Bank will be more conservative.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: Easing, as economic uncertainty rises.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: Falling oil prices and a stronger euro are gifts to ECB doves.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- Downside risks are building for EZ inflation, due mainly to the accelerated decline in energy prices.
- Initial evidence points to a disinflationary tariff shock to EZ core goods inflation, but keep an open mind.
- Services inflation will snap back in April, due to Easter effects, but the trend is still downward.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: Soft, but selling prices point to upside risks for the core.
Claus Vistesen (Chief Eurozone Economist)Eurozone
