- Swiss headline inflation rose in July, lifting our profile for the coming months…
- ...But downside risks are mounting, not least as we now see a recession in H2 from higher trade tariffs.
- We still expect the SNB to cut its key policy rate by 25bp in September, to -0.25%.
Melanie Debono (Senior Eurozone Economist)Eurozone
In one line: Above consensus; September cut hangs in the balance.
Melanie Debono (Senior Eurozone Economist)Eurozone
In one line: A blow for ECB doves and September rate cut hopes.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- The July HICP has raised the bar significantly for a September ECB rate cut…
- …But we won’t give up on our call until we see inflation data for August.
- A fall in core inflation, volatile markets, and US economic fragility could still pull a cut over the line.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: EZ inflation in July was not the dovish slam dunk we were expecting.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: Downtrend in jobless claims won’t last long.
Melanie Debono (Senior Eurozone Economist)Eurozone
In one line: No change; we still see the EZ HICP at 1.8% y/y.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- HICP inflation held steady in France in July, but dipped in Germany and Italy.
- The month-to-month changes in HICP prices point to EZ headline inflation staying at 2.0% in July.
- EZ unemployment was unchanged at a record low in June; we still expect a small rise by year-end.
Melanie Debono (Senior Eurozone Economist)Eurozone
In one line: EZ GDP growth slows from tariff front-running boost in Q1.
Melanie Debono (Senior Eurozone Economist)Eurozone
In one line: German and Italian GDP both fall by 0.1% q/q; available data now point to 0.1% increase in EZ GDP.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: Solid, but not enough to prevent a poor Q2.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- EZ GDP edged higher in Q2, helped by Portugal, Spain and France; Germany and Italy stumbled.
- We’re slightly more upbeat on investment, but we still see Eurozone exports in goods falling by 1% in H2.
- Inflation in Spain jumped in July, threatening our dovish forecast for the EZ HICP.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: Near-term inflation expectations are easing.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: Another big increase in Spanish GDP.
Melanie Debono (Senior Eurozone Economist)Eurozone
- Spanish GDP rose by a whopping 0.7% quarter-to-quarter in Q2, after 0.6% in Q1.
- Growth in the Iberian country will now likely slow, but not as much as we previously thought.
- The Spanish and Belgian data—released yesterday—are still consistent with 0.2% growth in the EZ in Q2.
Melanie Debono (Senior Eurozone Economist)Eurozone
EZ ECONOMY SHOWS RESILIENCE IN THE FACE OF TARIFF THREATS…
- …SUB-2% SUMMER INFLATION WILL GET A SEPTEMBER RATE CUT OVER THE LINE
Claus Vistesen (Chief Eurozone Economist)Eurozone
- The US-EU trade deal is a decent outcome for the EZ economy, but it will sting politically in Brussels.
- A relatively small 1% fall in Irish Q2 GDP points to upside risk to this week’s EZ GDP growth print.
- The probability of a September rate cut will increase this week if our July inflation forecasts prove right.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: Temporary slowdown in M1, we hope, resilient IFO and ISTAT surveys.
Claus Vistesen (Chief Eurozone Economist)Eurozone
