In one line: Factory orders remain depressed; net trade in goods soared in Q4.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: All due to base effects in energy; the downtrend in the core remains intact.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- EZ inflation was lifted by base effects in December; the downtrend in the core is uninterrupted.
- Markets are folding on expectations of a March rate cut; we aren’t, until we see January inflation figures.
- German retail sales plunged in November; seasonals have caught up with Black Friday shopping.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: Headline rebounds more than expected, but the core undershot our forecast.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: Revised higher, but still consistent with a technical recession.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: EZ headline rebounded in December, but the core likely eased further.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- EZ headline inflation will match the consensus today, but the core will undershoot expectations.
- The rebound in German inflation in December will be short-lived; the downtrend in the core continues.
- Sticky services inflation in France will soon roll over, judging by surveyed selling prices.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: Stable, but we doubt the trend in claims is improving.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- German jobless claims fell less than expected in December, but we doubt the trend is improving.
- Employment growth slowed midway through Q4, and momentum will wane further in Q1.
- Nominal income growth is slowing, but real wage growth is rebounding as inflation falls.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: EZ manufacturing remained in recession in Q4; is the plunge in M1 fading?
Claus Vistesen (Chief Eurozone Economist)Eurozone
- EZ manufacturing remained in recession in Q4, but global data point to an improvement in Q1.
- The slowdown in narrow money growth is easing, adding to upside risks for the composite PMI in Q1.
- Private sector lending growth slowed midway through Q4; it will slow further in H1 2024.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- Markets think the ECB will cut rates in March, as do we; inflation below 2% by February should do it.
- Energy prices are the key wildcard for headline inflation in Q1; so far the trend looks benign.
- In the core, non-energy goods inflation is about to collapse, but services inflation is still sticky.
Claus Vistesen (Chief Eurozone Economist)Eurozone
THE ECB IS DONE HIKING; WHEN WILL IT CUT?
- ...WE THINK EASING WILL BEGIN IN MARCH
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: Drop confirmed. Inflation will rebound in December, but what happens in January?
Claus Vistesen (Chief Eurozone Economist)Eurozone
- Inflation fell sharply in November; it will rebound in December, but what will happen in January?
- Our inflation forecasts remain at odds with the ECB’s; we still see a March rate cut.
- We’re betting that inflation falling below target will prompt the ECB to focus less on wage growth.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- Net exports are poised to lift GDP growth in Q4, but by how much? We look for a 0.1pp rise.
- Export growth will rebound next year, but we think imports will recover relatively more.
- We believe rising goods imports will weigh on net exports and GDP growth in 2024.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- Friday’s PMIs confirmed the EZ economy was still is in a rut in December, pointing to falling GDP in Q4.
- The PMI input price component suggests EZ headline inflation will stabilise at just under 2% in H1 24.
- Accelerating third quarter growth in hourly labour costs is grist on ECB hawks’ mills.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: Rapidly falling inflation and recessionary PMIs.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: If Mr. Powell is Santa, Ms. Lagarde is the Grinch.
Claus Vistesen (Chief Eurozone Economist)Eurozone
