In one line: The boost to GDP from rising net exports is reversing, we think.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- German manufacturing came roaring back in August, but output fell again in September.
- We estimate industrial production in Germany fell by 1.4% q/q in Q3, a touch worse than in Q2.
- Look past the fall in spending on non-durables for a more optimistic story on the EZ consumer.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- Comments from BdF Governor François Villeroy de Galhau all but guarantee a 25bp rate cut this month.
- EZ rate expectations and bond yields are too low relative to the medium-term outlook for inflation.
- We’ve lowered our bond yield forecasts, but still see bear-steepening of the yield curve next year.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: Probably underestimating the true strength in sales.
Melanie Debono (Senior Eurozone Economist)Eurozone
In one line: Chinese stimulus boosts investor sentiment.
Melanie Debono (Senior Eurozone Economist)Eurozone
In one line: Depressed by large orders; upside risks for industrial production in August.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- Eurozone house price growth rebounded strongly in Q2, and we think further increases are likely.
- We see signs that housing demand is picking up healthily amid falling interest rates.
- We now think house prices will rise by 1.5% in 2024 after they slid by 1.2% in 2023.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: Spanish industry entered recession in Q3.
Melanie Debono (Senior Eurozone Economist)Eurozone
In one line: Q3 will be better than expected for French industry.
Melanie Debono (Senior Eurozone Economist)Eurozone
In one line: Likely to fall further this month but also likely overdoing the weakness in the economy.
Melanie Debono (Senior Eurozone Economist)Eurozone
- Swiss inflation fell below 1% in September for the first time since 2021.
- Inflation averaged 1.1% in Q3, in line with the SNB’s call, but will fall further than the Bank expects in Q4.
- The door is wide open for further rate cuts; the SNB could take its key policy rate close to zero.
Melanie Debono (Senior Eurozone Economist)Eurozone
- The Eurozone unemployment rate held at 6.4% in September and is likely to remain steady for now.
- The ECB also sees a broadly unchanged unemployment rate over the coming quarters.
- A still-tight labour market will prevent neither a slowdown in wage growth nor more ECB easing.
Melanie Debono (Senior Eurozone Economist)Eurozone
In one line: Fall in core confirmed & headline below the ECB’s target; October’s rate cut is a go
Melanie Debono (Senior Eurozone Economist)Eurozone
In one line: Recession in EZ industry rumbles on.
Melanie Debono (Senior Eurozone Economist)Eurozone
- Headline inflation in the EZ fell below the ECB’s target in September for the first time since 2021.
- Deeper energy deflation was the main drag, but core inflation also eased a touch.
- We look for the ECB to cut twice more this year, by 25bp in both October and December.
Melanie Debono (Senior Eurozone Economist)Eurozone
In one line: German HICP inflation falls below 2% for the first time since March 2021; it will increase again in Q4.
Melanie Debono (Senior Eurozone Economist)Eurozone
- German HICP inflation is now below 2% for the first time since March 2021.
- As of September Italian inflation has been below 2% for a year, though it slid less than we thought.
- EZ inflation still likely fell to below the ECB’s target; today’s data will show it coming in at 1.8%.
Melanie Debono (Senior Eurozone Economist)Eurozone