- Domestic demand drove growth in the Eurozone in the second half of 2024; can it continue?
- Inventories and net trade will be important swing factors for growth in the first half of 2025.
- Our new forecasts put us well above the ECB; trade policy uncertainty is the dark horse.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: Another data point in favour of ECB hawks.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- Germany has fired a fiscal bazooka, which won’t go unnoticed by the ECB today.
- Swiss inflation fell further in February, to 0.3%; we think this is a trough, for now.
- We expect the SNB to cut by 25bp later this month, marking the final reduction in this easing cycle.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- The EU’s first defence package contains only a small element of joint loans; more will be needed soon.
- EZ unemployment remains pinned at a record low, though we think it will start rising soon, slowly.
- Markets see tariff risks as dovish for ECB policy, but the economic data are pulling in the other direction.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- The ECB will cut its policy rates by 25bp, but the argument for further easing is now much tougher.
- February inflation data mean the ECB’s forecast for Q2 inflation at 2.1% is now a Hail Mary.
- ECB doves will focus on downside risks to growth and employment from tariffs; they have a point.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: Consistent with a below-consensus EZ print on Monday.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: Consistent with the national CPI undershooting the consensus.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: Inflation pulled lower by energy, but the core softened too; setback in spending after a strong finish to 2024.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: Upturns in real M1 growth and credit impulse continue.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: Decent headline, but rising unemployment fears is a red flag.
Claus Vistesen (Chief Eurozone Economist)Eurozone
RISKS TO OUR HAWKISH ECB CALL ARE FOR LESS EASING...
- ...ASSUMING ONLY SMALL US TRADE TARIFF INCREASES
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: Stung by plunge in net exports; consumption is now growing, but weakly.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- The failure of FDP and BSW to reach 5% paves the way for a CDU/CSU and SPD coalition in Germany.
- Germany’s new government has its work cut out; fiscal reform and defence are at the top of the list.
- EZ inflation rose in January, but a sharp fall in energy inflation will pull the headline down in February.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: A local high, but still no perfect landing at 2%.
Claus Vistesen (Chief Eurozone Economist)Eurozone
