- French and Spanish inflation data lend support to ECB doves pushing for an October cut...
- ...But beware of whiplash in market pricing, if the German and Italian data don’t play ball.
- French consumer spending isn’t going anywhere in Q2; German jobless claims are still rising.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: Thomas Jordan ends reign as SNB Chairman with a cut; more easing is on the way.
Melanie Debono (Senior Eurozone Economist)Eurozone
In one line: Decent, but where is the spending growth?
Claus Vistesen (Chief Eurozone Economist)Eurozone
- The SNB has lowered its inflation forecasts towards our estimates, blaming a stronger CHF.
- It is unhappy with EURCHF and uncomfortable with its new end-of-horizon inflation call.
- We thought another cut would come in December, and we now also think it will trim rates in March.
Melanie Debono (Senior Eurozone Economist)Eurozone
In one line: Likely boosted by rapidly falling inflation.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- French households celebrate falling inflation, but confidence-sapping tax hikes loom on the horizon.
- France’s deficit will hit 6% of GDP soon without corrective action; markets won’t let that slide.
- Spending cuts alone won’t reduce the deficit in France, tax hikes will be needed too.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- Inflation has been lower than the SNB expected in Q3; it will cut its inflation forecasts this week…
- ...Thomas Jordan will go out with a bang, cutting rates for the fifth time as SNB Chairman.
- We look for at least one more cut, in December; risks are tilted towards less easing than we expect.
Melanie Debono (Senior Eurozone Economist)Eurozone
- The EZ PMIs plunged in September, as the boost from the Summer Olympics ended.
- Our EZ Nowcast for Q3 GDP looks ugly, but we think it is misleadingly pessimistic at this point.
- The ECB will consider an October rate cut if non-energy goods inflation stays subdued in September.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: Boost from the Olympics in August disappeared in September.
Melanie Debono (Senior Eurozone Economist)Eurozone
- INSEE survey data show further signs of stabilisation in September but remain soft overall.
- The Summer Olympics boosted Q3 GDP growth in France, but a payback looms in Q4.
- We look for a big fall in the EZ PMIs today as the Olympics boost to French services reaches an end.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: Better, but still consistent with weak growth in domestic demand.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: Pushed down by a reversal in the primary income balance.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- The Fed’s 50bp rate cut increases the chance of an ECB rate cut in October, but only marginally…
- …The bar remains high for a third ECB cut next month; September core goods inflation is key.
- The EZ current account surplus has rebounded, but it will roll over in due course.
Claus Vistesen (Chief Eurozone Economist)Eurozone
