In one line: Industrial production set for a solid Q4; will it be enough to save the GDP print?
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: Terrible headline, but better details; output jumped in October.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- Factory orders in Germany crashed in October, pegged back by a plunge in large orders…
- …But turnover jumped, by 3.6% on the month, pointing to a consensus-beating production report today.
- German manufacturing likely will do well in Q4, but the virus is now a severe risk for services.
Claus Vistesen and Melanie DebonoEurozone
In one line: December’s survey is not going to be pretty.
Melanie Debono (Senior Eurozone Economist)Eurozone
In one line: Still no signs of easing supply constraints in the surveys.
Melanie Debono (Senior Eurozone Economist)Eurozone
- EZ inflation is running red hot, hitting a record high of 4.9% in November.
- Shipping costs to the Eurozone's most important trading partners are still rising...
- ...Still, the fall in global measures points to shipping costs dragging headline inflation down.
Claus Vistesen and Melanie DebonoEurozone
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German consumers' spending soared in Q3, offsetting falling investment and net exports.
We are lowering our Q4 growth forecasts to 0.4-to- 0.5%, from 0.7% before; the virus is a threat.
German investment in machinery and equipment looks terrible; it will get better next year.
Claus Vistesen and Melanie DebonoEurozone
- The Q4 survey data in France have been robust so far, pointing to solid underlying GDP growth…
- …But the return of the virus threatens new restrictions, putting Christmas festivities in question.
- We're reducing our forecast for Q4 quarteron-quarter GDP growth, by 0.6pp, to 0.6%.
Claus Vistesen and Melanie DebonoEurozone
In one line: Solid, but also old news given the recent surge in virus cases.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: Better than expected but still points to slower GDP growth.
Melanie Debono (Senior Eurozone Economist)Eurozone
In one line: New restrictions will weigh on the index next month.
Melanie Debono (Senior Eurozone Economist)Eurozone
In one line: Services supporting activity, but for how much longer?
Melanie Debono (Senior Eurozone Economist)Eurozone
- Switzerland's economy probably grew by 2% q/q in Q3, taking output back above its pre-virus level.
- Q3 is old news; growth is now slowing and the risks to the outlook are rising as virus cases surge.
- The SNB won't stay happy with CHF 1.05 per euro for much longer.
Claus Vistesen and Melanie DebonoEurozone
- Euro depreciation adds additional upside risk to the ECB's December core inflation forecasts.
- The outlook for relatively rapid Fed tightening is leading the euro lower, but fundamentals matter too.
- Recent comments from Isabel Schnabel suggest the ECB is o.k. with expectations of a hike in 2023.
Claus Vistesen and Melanie DebonoEurozone
- Inflation in the Eurozone is still rising, but it will cool next year as core goods and energy inflation ease…
- …But rising services inflation will keep the core rate uncomfortably high for the ECB in H1 22.
- Construction output in the EZ rebounded at the end of Q3; we look for further gains through Q4.
Claus Vistesen and Melanie DebonoEurozone
- EZ GDP and employment rebounded robustly in the third quarter, but growth is now slowing.
- We're sticking to our view of 0.8% q/q GDP growth in Q4, but risks are piling up to the downside.
- Core inflation in France will remain close to 1.5% through Q4, but we think the trend is around 1.0%.
Claus Vistesen and Melanie DebonoEurozone
In one line: A weak quarter; don’t expect much more from Q4.
Melanie Debono (Senior Eurozone Economist)Eurozone
- Spain's GDP breakdown suggests that consumers' spending fell in Q3; it almost surely didn't.
- An upward revision to consumption will offset down-ward revisions to net trade and manufacturing.
- We think revisions will show that GDP rose by 2.5% in Q3, 0.5pp quicker than first estimated.
Claus Vistesen and Melanie DebonoEurozone
- GDP growth in Germany stalled at the end of Q3, and the rebound in early Q4 looks tepid.
- Growth in France is now slowing, but momentum at the end of Q3 was encouragingly robust.
- Industrial production in Spain rose modestly in September, not enough to salvage Q3 as a whole.
Claus Vistesen and Melanie DebonoEurozone
