5 June 2025 Eurozone Monitor Is a butterfly flapping its wings in Japan's bond markets?

• EZ sovereigns have been largely spared in the global bond-market rout, but French bonds remain fragile. 
• Foreigners own more than half of government bonds in France, with Japanese savings a key swing factor. 
• We think Japan owns around €165B-worth of French government bonds, or 5% of French GDP.

4 June 2025 Eurozone Monitor Soft inflation data signal dovish ECB and SNB meetings in June

• Inflation in both the EZ and Switzerland fell below the respective central-bank targets in May. 
• In the EZ, the decline solidifies the need for a rate cut this month, and we look for another one in Q3.
• In Switzerland, deflation is likely to become a mainstay, so brace for a 50bp rate cut from the SNB.

PM Datatnote: EZ Money Supply and Detailed Q1 GDP in Italy

In one line: Upturn in money supply continues; Italian GDP on a solid footing in Q1.

EZ Datanote: State CPIs, Germany, May 2025

In one line: Strong, but remember difference in base effects in the CPI and HICP. 

EZ Datanote: Retail Sales, Germany, April 2025

In one line: Consumption growth will slow in Q2. 

May 2025 - EZ Economic Chartbook

A TENSE MONTH OF EU-US TRADE NEGOTIATIONS LIES AHEAD...

• ...WE STILL SEE UNCERTAINTY WEIGHING ON GROWTH