- Growth in compensation-per-employee and the ECB’s wage tracker are easing…
- ...in line with other measures of EZ wage growth, pointing to a sustained slowdown this year.
- We doubt that wage growth will fall to close to 1%, as implied by the ECB’s wage tracker.
Melanie Debono (Senior Eurozone Economist)Eurozone
In one line: Surging, thanks to Germany’s “whatever it takes” moment.
Melanie Debono (Senior Eurozone Economist)Eurozone
In one line: Solid rise in industrial output, but net trade remains subdued.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- Services production was up sharply in Q4, thanks to continued strength in IT services.
- Surveys remain positive on the outlook for services, and the sector will lead the increase in GDP in Q1.
- Our nowcast model is looking ugly, but we reiterate our call for a pick-up in EZ GDP growth, for now.
Melanie Debono (Senior Eurozone Economist)Eurozone
- The range of economic outcomes in the Eurozone is widening; be ready for whiplash in the surveys.
- High-stakes negotiations between the EU and the US in Q2, on tariffs, Ukraine, NATO and Greenland.
- Mixed economic data in Germany; is industrial production finally rebounding?
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: Revised up thanks to a solid showing from domestic demand.
Melanie Debono (Senior Eurozone Economist)Eurozone
In one line: Stung by plunge in major orders; core orders should rise in coming months.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- Domestic demand drove growth in the Eurozone in the second half of 2024; can it continue?
- Inventories and net trade will be important swing factors for growth in the first half of 2025.
- Our new forecasts put us well above the ECB; trade policy uncertainty is the dark horse.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: Not the start to Q1 we’d hoped for. .
Melanie Debono (Senior Eurozone Economist)Eurozone
In one line: Construction downturn intensifies midway through Q1.
Melanie Debono (Senior Eurozone Economist)Eurozone
In one line: Italian growth fared better than previously thought in Q4, and should now pick up.
Melanie Debono (Senior Eurozone Economist)Eurozone
- The ECB is playing it safe; trade uncertainty outweighs upside risks from fiscal stimulus, for now.
- April is wide open, but the ECB will pause its easing unless it perceives US tariffs on a sustained basis.
- The ECB has pushed out the point at which inflation hits 2%; it will soon have to abandon the idea entirely.
Melanie Debono (Senior Eurozone Economist)Eurozone
In one line: Another data point in favour of ECB hawks.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- Germany has fired a fiscal bazooka, which won’t go unnoticed by the ECB today.
- Swiss inflation fell further in February, to 0.3%; we think this is a trough, for now.
- We expect the SNB to cut by 25bp later this month, marking the final reduction in this easing cycle.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- The EU’s first defence package contains only a small element of joint loans; more will be needed soon.
- EZ unemployment remains pinned at a record low, though we think it will start rising soon, slowly.
- Markets see tariff risks as dovish for ECB policy, but the economic data are pulling in the other direction.
Claus Vistesen (Chief Eurozone Economist)Eurozone
