In one line: Q2 slowdown confirmed; industry partly to blame.
Melanie Debono (Senior Eurozone Economist)Eurozone
- The slowdown in EZ GDP growth in Q2 was confirmed, mainly due to weakness in industry.
- Industry will likely be a bigger drag on GDP in Q3, and the strength in construction will not continue.
- The labour market continues to support GDP growth; surveys suggest employment will stay solid.
Melanie Debono (Senior Eurozone Economist)Eurozone
In one line: Down, in line with the fall in the sentix.
Melanie Debono (Senior Eurozone Economist)Eurozone
- Swiss GDP growth likely slowed sharply in Q2 from the 0.8% q/q read in Q1 led by tariff front-running.
- Hard data and surveys imply a print of around 0.2% quarter-to-quarter.
- Switzerland will enter recession in H2, even if “gold will not be tariffed!”.
Melanie Debono (Senior Eurozone Economist)Eurozone
- The ZEW confirms the message from the Sentix: investors don’t like the EU-US trade deal.
- Investor sentiment indices still point to a rise in the PMI in the coming months, but we doubt it.
- The EZ economy will struggle now that US tariffs have risen further.
Melanie Debono (Senior Eurozone Economist)Eurozone
- The shape of the Phillips curve is unstable over time, but its shifts are difficult to pin down with data.
- Data point to a flat PC in the EZ, and a high sacrifice ratio for the ECB, but only for demand-pull inflation.
- Our estimates of the NKPC support our broader call that EZ inflation will ultimately settle above 2%.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- National data for Q2 suggest a rise in EZ negotiated wage growth after a plunge in Q1.
- Early data for Q3 are mixed, but stable inflation points to wage growth holding broadly steady ahead.
- Falling Irish and German industrial production mean EZ industry had a difficult end to Q2.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: Industrial output will be revised up; net trade was a drag on GDP growth in Q2.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- Industrial production in Germany plunged in June, or did it? We are not so sure.
- Green shoots in leading indicators for German capex, but an inventory overhang still looms in H2.
- German exports remain stuck in the mud, and US tariffs add further downside risk in H2.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: A small increase in both June and Q2 overall.
Melanie Debono (Senior Eurozone Economist)Eurozone
In one line: Where is the light at the end of the tunnel?
Melanie Debono (Senior Eurozone Economist)Eurozone
- Italian industrial output edged up in June, while German turnover figures point to a rise there too.
- EZ industry fared well in Q2, a further correction in Irish production permitting.
- EZ retail sales recorded a decent June and suggest goods spending supported GDP in Q2.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: Decent, and Q3 looks set to be good too.
Melanie Debono (Senior Eurozone Economist)Eurozone
In one line: Soaring as transport and refineries kick into gear
Claus Vistesen (Chief Eurozone Economist)Eurozone
- The EZ PMI was revised down, largely due to a downward revision to France’s already-weak index.
- Spain’s and Italy’s composite PMIs are much higher than those of France and Germany.
- French industrial production soared in June, but mainly on the back of a one-off in transport.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: Investors give EU-US trade deal a thumbs down.
Melanie Debono (Senior Eurozone Economist)Eurozone
