- 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
- 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
- German auto output crashed in August; we're nudging our Q3 GDP growth forecasts down, to 2.0% q/q.
- The Q3 plunge in German industry is clear evidence that supply-side woes are now hitting demand.
- The services surplus in France is rising strongly; net exports likely rebounded in Q3.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- EZ inflation expectations don't predict inflation, but they're not entirely without value either.
- Industrial production in France rose again in August; Q3 as a whole likely was decent.
- We think the PMI surveys are underestimating actual GDP growth in Q3, especially in Spain.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- No one expects any changes at the SNB today, us included; we think policy will be on hold until 2024.
- The CHF will strengthen to the end of the year, but not enough to warrant significant FX intervention.
- Markets are worried about Evergrande—rightly—but contagion is limited, for now.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- A cold winter will turn rising gas prices into a macroeconomic issue; Q4 risks are tilted to the downside.
- Car sales in the Eurozone aren't going anywhere, mirroring the slump in production.
- The EV transition is underway in Europe, but lack of timely infrastructure investment is a challenge.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- VAT base effects in core goods were the main driver of the July leap in German inflation.
- The yawning gap between national and HICP services inflation will close soon; the latter will rebound.
- We now see clear evidence of a reopening bump in hospitality prices; will it be sustained?
Claus Vistesen (Chief Eurozone Economist)Eurozone
German factory orders surged in June, more than reversing May's plunge ...
... But turnover data point to a weak end to Q2 for industry; we look for a 0.5% monthly fall in June.
French industry continued to tread water; even though car output rose for the first time this year.
Claus Vistesen (Chief Eurozone Economist)Eurozone
The ECB formally presented its new inflation target yesterday, and updated the forward guidance on rates attached to it.
Claus Vistesen (Chief Eurozone Economist)Eurozone
Yesterday's detailed inflation data in Germany and France were similar, at least as far as the main story goes.
Claus Vistesen (Chief Eurozone Economist)Eurozone
Manufacturing in Germany has stalled. Data yesterday showed that industrial production, including construction, edged lower by 0.3% month-to-month in May, matching the revised decline in April.
Claus Vistesen (Chief Eurozone Economist)Eurozone
Weakness in the core remained a drag on euro area manufacturing midway through Q2, amid strength elsewhere.
Claus Vistesen (Chief Eurozone Economist)Eurozone
Yesterday's main economic reports point to mixed conditions in euro area manufacturing at the start of Q2.
Claus Vistesen (Chief Eurozone Economist)Eurozone
Friday's data in the core EZ economies confirmed our suspicion that the reality in manufacturing at the start of the year was not as rosy as implied by the headline surveys and new orders data.
Claus Vistesen (Chief Eurozone Economist)Eurozone
