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Eurozone Publications

Below is a list of our Eurozone Publications for the last 6 months. If you are looking for reports older than 6 months please email info@pantheonmacro.com, or contact your account rep

Please use the filters on the right to search for a specific date or topic.

bond yields

2 Nov 2022 Eurozone Monitor EZ Governments are Low-balling their 2023 Budget Forecasts

  • The EZ budget deficit fell in Q2; we think it will widen to year-end, but are revising down our 2022 forecast.
  • Fiscal plans for 2023, and slower nominal growth, point to a deficit of 3.5% next year, as in 2022.
  • Interest costs are rising, as government bond yields creep higher, but the debt ratio will still fall.

Melanie Debono (Senior Eurozone Economist)Eurozone

13 Oct 2022 Eurozone Monitor EZ Industrial Output Struggled in Q3, Despite a Decent August

  • EZ industrial production rose strongly in August, but we still think output fell over Q3 as a whole.
  • Current levels of oil and gas prices mean that Euro- zone energy inflation will soon fall sharply.
  • Spreads between yields in Italy and Germany are nearing levels that the ECB will struggle to ignore.

Claus Vistesen (Chief Eurozone Economist)Eurozone

28 Sept 2022 Eurozone Monitor If We are Right on Inflation, the ECB will Hike by 75bp Next Month

  • We detect no push-back from ECB policymakers against the idea of a 75bp rate hike next month.
  • The ECB is clear in its message; higher rates are needed to reduce demand in line with supply.
  • Quantitative tightening makes little sense in the EZ, but the discussion has started, all the same.

Claus Vistesen (Chief Eurozone Economist)Eurozone

27 Sept 2022 Eurozone Monitor The 2s10s Bund Curve is about to Invert; What Happens Next

  • Bond yields in Germany are rising at their fastest pace this side of reunification.
  • The German 2s10s yield curve has collapsed to zero; we think it will invert soon.
  • Normally, an inverted yield curve points to a policy mistake by the central bank, but not this time.

Claus Vistesen (Chief Eurozone Economist)Eurozone

22 Sept 2022 Eurozone Monitor The Centre-Right Looks Set to Win in Italy; Big Challenges Await

  • Polls point to a right-wing coalition leading Italy soon; the economy is still headed for recession.
  • Deep-rooted issues need to be tackled to ensure a growth profile that keeps public debt sustainable.
  • BTP yields will rise until the new PM starts work, but will fall next year as political uncertainty abates.

Melanie Debono (Senior Eurozone Economist)Eurozone

21 Sept 2022 Eurozone Monitor The EZ Current Account Crashed at the Start of the Third Quarter

  • The Eurozone’s current account swung to a big deficit in July, playing catch-up with Eurostat’s data.
  • Currency weakness is still mainly increasing the cost of imports; but exports will benefit, eventually.
  • Portfolio in-and outflows are collapsing, and we think this trend has further to run.

Claus Vistesen (Chief Eurozone Economist)Eurozone

31 Aug 2022 Eurozone Monitor The ECB is Priming Markets for a Series of 50bp Rate Hikes

  • We now think the ECB will lift rates by 50bp three times this year, but still expect a pause in H1-23.
  • Today's EZ inflation data will offer little relief for markets recently stung by hawkish ECB comments.
  • Surveyed inflation expectations are falling, in line with the idea of a reduced tightening pace in 2023.

Claus Vistesen (Chief Eurozone Economist)Eurozone

25 Aug 2022 Eurozone Monitor One Month to go: A Right-Wing Coalition in Italy Seems a Safe Bet

With one month to go, polls point to a right-wing coalition government in Italy from next month.

The BTP yield has risen more than other government yields; we think it will rise to 4.0% by end-Q3.

We doubt the small rise in EZ consumer confidence in August is the start of a sustained rebound.

Melanie Debono (Senior Eurozone Economist)Eurozone

23 Aug 2022 Eurozone Monitor Windfall Taxes are a Risk to the Profit Outlook of EZ Banks

Higher inflation for longer will lead to higher interest rates, which will support banks’ interest margins.

This implies higher profits, which makes bank equities attractive right now.

But risks to the profit outlook remain in the form of windfall taxes and falling demand for loans.

Melanie Debono (Senior Eurozone Economist)Eurozone

22 Aug 2022 Eurozone Monitor The Swiss Economy won't be Unscathed by the EZ Recession

  • Swiss GDP likely rose by 0.5% in Q2, the same as in Q1, and more or less in line with the EZ aggregate.
  • The German recession will weigh on Swiss industry in H2, and consumers’ income is being squeezed.
  • We look for GDP growth broadly to stagnate in H2, but the SNB is still likely to hike rates further

Claus Vistesen (Chief Eurozone Economist)Eurozone

12 Aug 2022 EZ Monitor The ECB will Flexibly Reinvest PEPP Redemptions through H2

We think the ECB will continue to buy peripheral bonds using redemptions from core countries...

...This should, we think, mean that the TPI can remain in the shadows this year.

We still believe the ECB will hike by 100bp more this year; the bund 2s10s will invert in Q1-23.

Claus Vistesen (Chief Eurozone Economist)Eurozone

5 Aug 2022 EZ Monitor If polls are right, Italy will soon get a right-wing government

If polls are to be believed, the next Italian government will be formed of a right-wing coalition.

This does not change the near-term outlook for the Italian economy; it will be in recession by Q4.

Markets shouldn’t fear the right wing, but equally they should not forget its unpredictability.

Claus Vistesen (Chief Eurozone Economist)Eurozone

1 Aug 2022 EZ Monitor Robust GDP and Inflation Data Point to a 50bp Hike in September

Strong EZ macro data signal a 50bp hike in  September, but we no longer see a hike in February.

The German economy stalled in Q2, setting the scene for a technical recession in H2....

...EZ GDP rose by a solid 0.7% q/q in Q2, but we think it will be revised lower in time, probably to 0.4%.

Claus Vistesen (Chief Eurozone Economist)Eurozone

26 July 2022 EZ Monitor Falling EZ Inflation Expectations will be a Relief for the ECB

Most measures of inflation expectations are falling, supporting our view that inflation is near its peak.

After starting its hiking cycle last week, the ECB will be able to take a break next year.

The drop in the IFO adds to the evidence that the EZ’s largest economy is now in a technical recession.

Melanie Debono (Senior Eurozone Economist)Eurozone

25 July 2022 EZ Monitor The EZ Economy is in a Tightening Stagflationary Vice

The PMIs now warn that the EZ economy is sliding into recession, consistent with our outlook.

Inflation and supply-side pressures are easing, but not quickly enough to offer any near-term relief.

The ECB is caught in a stagflationary vice; it will continue hiking even as growth slows.

Claus Vistesen (Chief Eurozone Economist)Eurozone

22 July 2022 EZ Monitor The ECB goes big on rates, and Italy heads for elections

The ECB ends forward guidance with a surprise 50bp hike; we see 25bp in September and October.

The new anti-fragmentation tool sounds like a bazooka, but after reading the details, we are not sure.

Italy will head to the polls in September; the far-right is polling highest.

Claus Vistesen (Chief Eurozone Economist)Eurozone

20 July 2022 The ECB will Lift its Depo Rate by 25bp this week...or Maybe 50bp

We think the ECB will raise its depo-rate by 25bp this week, to -0.25%; a 50bp hike would not be a shock.

The ECB’s new anti-fragmentation tool probably won’t be unveiled in full this week.

Output in euro area construction fell in Q2, but it was only a minor drag on GDP growth.

Claus Vistesen (Chief Eurozone Economist)Eurozone

19 July 2022 Fiscal Aid in Spain and Italy is Not Enough to Boost Consumption

Italy’s overall aid to offset rising living costs still trails that in Spain, despite new fiscal support.

The measures announced so far likely won’t fully offset the hit to real incomes from higher inflation.

Windfall taxes are not enough, and further debt issuance will keep a floor under debt servicing costs.

Melanie Debono (Senior Eurozone Economist)Eurozone

15 July 2022 When will Swiss Inflation Start to Fall? August is a Good Bet

All signs point to a drop in Swiss imported inflation; weaker growth will weigh on domestic prices.

Calling the peak in the headline rate is fraught with difficulty; our best bet is August.

A snap election may still be avoided, despite Italy’s Prime Minister Draghi’s resignation.

Melanie Debono (Senior Eurozone Economist)Eurozone

4 July 2022 Another Consensus-Beating CPI Print, But no 50bp Hike this Month

Headline inflation in the Eurozone hit a new record in June, and it will rise further still in Q3.

Falling rate expectations are easing the pressure on the ECB; we think it will stick to 25bp this month.

EZ manufacturing is still weakening; EURCHF will hover around parity through Q3.

Claus Vistesen (Chief Eurozone Economist)Eurozone

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