In one line: Inflation held steady, but declines are coming; we are adding a July ECB rate cut.
Melanie Debono (Senior Eurozone Economist)Eurozone
- We now think EZ investment is falling, mainly due to sustained weakness in machinery and equipment.
- Leading indicators for construction and services capex look solid, at least before the tariff shock.
- Surveys point to downside risks for inventories in H1, but brace for significant volatility this year.
Melanie Debono (Senior Eurozone Economist)Eurozone
In one line: GDP growth pick up in Q1 will prove short-lived as trade uncertainty hits.
Melanie Debono (Senior Eurozone Economist)Eurozone
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: Down but pointing to higher inflation expectations.
Melanie Debono (Senior Eurozone Economist)Eurozone
In one line: Business sentiment sours on pessimism in services.
Melanie Debono (Senior Eurozone Economist)Eurozone
In one line: EZ inflation expectations jumped on the eve of the tariff shock.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: Growth slowed but remained solid; Inflation comes in below expectations.
Melanie Debono (Senior 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: In line with our view that consumer spending growth is now slowing.
Melanie Debono (Senior Eurozone Economist)Eurozone
In one line: French industry intends to make hay while the sun is still shining.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: Lifted by tariff front-running, still pointing to downside risks to growth.
Melanie Debono (Senior Eurozone Economist)Eurozone