- EZ auto sales fell in 2021, again, though we suspect they rebounded in Q4, after a terrible Q3.
- Investment by EZ auto-makers has fallen in line with weakening production, due to supply-side woes…
- …But employment has rebounded strongly, pointing to underlying confidence in the future.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: Are analysts too positive on Germany? We think so.
Melanie Debono (Senior Eurozone Economist)Eurozone
In one line: Q4 was nothing to write home about, Q1 likely will be worse.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- Valuations point to subpar returns for euro area large-cap equities in the post-pandemic expansion.
- Equities in Spain and Italy are priced for average returns of around 10% in the next five years…
- …The corresponding numbers for German and French equities are just 5% and 2½%, respectively.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- EZ unemployment fell further in November, due to an improvement in all major economies.
- Unemployment in the euro area will fall below 7% soon, even with Omicron now a near-term threat.
- Our labour market forecasts imply accelerating wage growth in 2022; the ECB will take note.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: Strangely weak industrial production; nominal imports are surging due to rising energy costs.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- German factory orders are running hotter than manufacturing production...
- ...And the jump in manufacturing turnover points to a consensus-beating production report today.
- Headline inflation in Germany was broadly stable in December, but the core rate rose further.
Claus Vistesen and Melanie Debono (Eurozone Team)Eurozone
In one line: Still hot, but also old news; both the headline and core will fall in January.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: Orders rebound; turnover points to consensus-beating production data tomorrow.
Melanie Debono (Senior Eurozone Economist)Eurozone
- Advance November retail sales data point to relative strength in EZ consumption midway through Q4.
- Germany's labour market recovery continued in Q4, but surveys warn of a setback in Q1.
- Headline inflation in France remained high in December, but energy inflation is now falling.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: Solid, but surveys warn of a setback at the start of Q1.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: Decent, but we think sales fell in December.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- Omicron is less of a burden on hospitals than Delta, but surging cases will still lead to restrictions in Q1.
- Warm weather and energy imports are driving a fall in natural gas prices; good news for consumers.
- The slowdown in real M1 growth points to a further fall in the EZ composite PMI in Q1, to about 52.
Claus Vistesen and Melanie Debono (Eurozone Team)Eurozone
- The ECB’s data continue to paint a less dramatic picture of trade in goods than Eurostat's numbers.
- Net services exports likely will jump in Q4, but this will be offset in part by a fall in IP capex.
- The euro glut has expanded during the pandemic, due mainly to a rise in EZ foreign equity holdings.
Claus Vistesen and Melanie Debono (Eurozone Team)Eurozone
In one line: Hit by surging virus cases, and worse is coming.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- We are raising our headline inflation forecasts for next year, but we're still well behind the ECB.
- Core inflation will hover around 2% for much of next year, causing a headache for the central bank.
- More poor survey data reassert our view that Q4 and Q1 won’t be pretty for the EZ’s largest economy.
Claus Vistesen and Melanie Debono (Eurozone Team)Eurozone
In one line: More evidence of a near-term slowdown.
Claus Vistesen (Chief Eurozone Economist)Eurozone
The ECB will end PEPP in March, but is keeping the door open for a resumption if the virus worsens.
ECB asset purchases will be around €500B next year on current plans, half the pace in 2021.
The SNB is standing pat, as expected, and we're lowering our outlook for EZ growth in Q1.
Claus Vistesen and Melanie Debono (Eurozone Team)Eurozone
In one line: Stung by the virus, and it will get worse in Q1.
Claus Vistesen (Chief Eurozone Economist)Eurozone
Ms. Lagarde will stick to the signal that PEPP is likely to end in March, but Omicron is a big risk to this call.
The ECB's inflation forecasts will increase today; how close to 2% will they be for 2023 and 2024?
No rate hikes in 2022, but speculation about lift-off will intensify in the next six-to-12 months.
Claus Vistesen and Melanie Debono (Eurozone Team)Eurozone
