Eurozone Publications
Below is a list of our Eurozone Publications for the last 6 months. If you are looking for reports older than 6 months please email info@pantheonmacro.com, or contact your account rep
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Daily Monitor Chartbook Claus Vistesen (Chief Eurozone Economist)
- Germany’s economy is in a cyclical rut; it remains to be seen whether its problems are more structural.
- Nominal GDP in Germany has been soaring, but higher prices have compressed growth in real terms.
- Many politicians in Germany want to tighten fiscal policy, but will the economy allow it?
Claus Vistesen (Chief Eurozone Economist)Eurozone
- GDP in Spain grew by 2.5% last year, more than in any of the other major EZ economies.
- This year, quarter-to-quarter growth will remain solid, such that GDP rises by 2%.
- German industrial orders soared in December but they were skewed by major orders mainly in aircraft.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- The ECB’s policy rate is 100-to-150bp too tight; it will align with two-year yields by the end of the year.
- We see near-term downside risk to Bund yields but then look for bear-steepening in H2.
- Our forecasts for the bond markets assume a soft landing in the economy; what if we’re wrong?
Claus Vistesen (Chief Eurozone Economist)Eurozone
- Lingering votes to hike Bank Rate distract from most members’ endorsement of rate cuts this year...
- ...Two-year-ahead inflation is forecast nearer 2% under market rates than constant rates; upside skew has gone.
- We still expect the first 25bp cut to come in May, but the risks remain tilted towards a later commencement.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- EZ inflation likely fell by 0.2pp in January, to 2.7%, with the core rate down 0.3pp, to 3.1%.
- The ECB remains on track to downgrade its 2024 inflation forecasts in March, by a lot.
- German retail sales plunged, again, in Q4; the fall in jobless claims in January is likely a blip.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- This week’s January inflation data will be key for the ECB’s decisions and communication in H1 2024.
- We look for a downside surprise in the EZ, but the January report is a wildcard; anything can happen.
- EZ GDP likely fell in Q4—confirming a recession— worse than the ECB predicted in December.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- The ECB left all its policy settings unchanged yesterday, as everyone expected it to.
- President Lagarde stuck to the line that a spring rate cut is unlikely but didn’t explicitly push back on it...
- ...Data next week will, we think, give the Bank the confidence it needs to cut rates first in March.
Claus Vistesen (Chief Eurozone Economist)Eurozone
THE ECB IS DONE HIKING; WHEN WILL IT CUT?
- ...WE THINK EASING WILL BEGIN IN MARCH
Claus Vistesen (Chief Eurozone Economist)Eurozone
- This week the ECB will continue to push back against expectations of a rate cut in the first half of 2024...
- ...But the central bank is now happy to underwrite the consensus position of a rate cut by summer.
- We still see the ECB cutting by March, as January and February HICP surprise to the downside.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- The slowdown in EZ construction intensified in Q4 and won’t improve any time soon.
- A sharply wider primary income deficit stung the EZ current account surplus in November.
- EZ portfolio outflows accelerated in Q4, but the market setback in January points to a pullback in Q1.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- The ECB is not happy with market expectations for a spring rate cut but is fine with June.
- If our forecast for inflation to fall below 2% by February is right, the ECB will cut in March.
- Plunging PPI points to downside risks to services inflation, but the output price PMI is still high.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- German GDP fell by 0.1% in 2023, which—according to Destatis—includes a 0.3% decline in Q4.
- Manufacturing in the euro area remained in recession in Q4, but net trade in goods jumped.
- We think EZ GDP fell by 0.2% quarter-to-quarter in Q4, due to broad-based domestic weakness.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- New budget rules in the EU will put France, Italy and Spain on the spot, but will they be enforced?
- The Commission’s fiscal proposals leave plenty of room for exceptions and long adjustment paths.
- Retaining the 60% debt-to-GDP threshold exposes many countries to prolonged adjustment plans.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- German manufacturing remained subdued in Q4, but net trade in goods likely soared.
- Retail sales in the euro area fell midway through Q4, due principally to weakness in Germany.
- Investor sentiment continues to signal upside risk for the EZ composite PMI at the start of 2024.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- EZ headline inflation will match the consensus today, but the core will undershoot expectations.
- The rebound in German inflation in December will be short-lived; the downtrend in the core continues.
- Sticky services inflation in France will soon roll over, judging by surveyed selling prices.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- German jobless claims fell less than expected in December, but we doubt the trend is improving.
- Employment growth slowed midway through Q4, and momentum will wane further in Q1.
- Nominal income growth is slowing, but real wage growth is rebounding as inflation falls.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- EZ manufacturing remained in recession in Q4, but global data point to an improvement in Q1.
- The slowdown in narrow money growth is easing, adding to upside risks for the composite PMI in Q1.
- Private sector lending growth slowed midway through Q4; it will slow further in H1 2024.
Claus Vistesen (Chief Eurozone Economist)Eurozone
THE ECB IS DONE HIKING; WHEN WILL IT CUT?
- ...WE THINK EASING WILL BEGIN IN MARCH
Claus Vistesen (Chief Eurozone Economist)Eurozone
- Inflation fell sharply in November; it will rebound in December, but what will happen in January?
- Our inflation forecasts remain at odds with the ECB’s; we still see a March rate cut.
- We’re betting that inflation falling below target will prompt the ECB to focus less on wage growth.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- Net exports are poised to lift GDP growth in Q4, but by how much? We look for a 0.1pp rise.
- Export growth will rebound next year, but we think imports will recover relatively more.
- We believe rising goods imports will weigh on net exports and GDP growth in 2024.
Claus Vistesen (Chief Eurozone Economist)Eurozone
