- A temporary reprieve in the US–China trade war is worth far less than financial markets are assuming.
- Early signs suggest Mr. Trump will go hard on the EU, keeping uncertainty for the EZ economy elevated.
- Isabel Schnabel is coming out swinging for ECB hawks, but will her argument carry the day?
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: Industry will likely support GDP again in Q2, but downside risks remain.
Melanie Debono (Senior Eurozone Economist)Eurozone
- The EU’s announcement of retaliation against US tariffs is an attempt to get Washington to the table.
- Brussels’ WTO case against the US indicates that it won’t accept 10% as a floor for tariffs.
- EU purchases of energy, agricultural products and defence goods are the clearest route to a deal.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: Decent, and strength likely to continue for now.
Melanie Debono (Senior Eurozone Economist)Eurozone
In one line: Soaring; Q1 GDP growth on track for an upward revision.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: Still trending sideways, as they have since November.
Melanie Debono (Senior Eurozone Economist)Eurozone
In one line: Rise in demand in Germany pulls up headline.
Melanie Debono (Senior Eurozone Economist)Eurozone
- The EZ construction PMI rose in April, on the back of a recovery in new orders in Germany.
- Construction activity is still faring better in Italy than in Germany or France.
- The sector is likely to support EZ GDP in Q2, as it seems to have done in Q1.
Melanie Debono (Senior Eurozone Economist)Eurozone
- Swiss inflation fell to a lower-than-expected zero in April, with a knock-on effect on our forecasts…
- ...We now see deflation until mid-2026; the SNB will cut its policy rate below zero in June in response.
- We look for a 50bp rate cut at the next meeting, taking the key policy rate to -0.25%.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- Jump in April core inflation was due to Easter effects in services; the remaining components were soft.
- Dovish forecasts from the ECB will pave the way for for a back-to-back 25bp rate cut next month…
- …and we now look for an additional 25bp cut in July, but also hikes next year, in June and September.
Melanie Debono (Senior Eurozone Economist)Eurozone
In one line: Consistent with slower growth in Q2.
Melanie Debono (Senior Eurozone Economist)Eurozone
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
