EZ Datanote: Money Supply, Eurozone, October

In one line: M1 data imply EZ activity will continue to slide.

Melanie Debono (Senior Eurozone Economist)Eurozone

29 Nov 2022 Eurozone Monitor We See no Green Shoots in the Eurozone Money Supply Data

The gap between M1 growth and soaring inflation widened in October and still points to falling output.

Households’ deposits are now falling outright, likely driven in part by a run-down of pandemic savings.

The outlook for lending supports our call for slowing growth in consumers’ spending and investment.

Claus Vistesen (Chief Eurozone Economist)Eurozone

23 Sept 2022 Eurozone Monitor The SNB's 75bp Hike will be a One- Off; Expect 50bp in December

• The SNB joined the 75bp rate hike club yesterday; it won’t stay there for long.
• We expect a 50bp hike in December, taking the rate to 1.00%, and we think the Bank will pause in 2023.
• Unlike the ECB, the SNB is capping the amount of bank deposits that will benefit from higher rates.

Melanie Debono (Senior Eurozone Economist)Eurozone

14 Sept 2022 Eurozone Monitor Will the Energy Crisis and ECB hikes lead to a Credit Crunch?

• Our forecasts for ECB rates imply a rise in mortgage rates of over 400bp, raising the risk of defaults.
• Rising mortgage rates will mean house prices will be falling by around 1% year-over-year by end 2023.
• Higher risk is already discouraging banks from lending, but a credit crunch will likely be avoided.

Melanie Debono (Senior Eurozone Economist)Eurozone