In one line: Energy inflation is easing, but the core is holding firm.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: Energy remains the key driver, but the core looks “uncomfortably high” too.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- Record-high EZ inflation all but guarantees a 75bp rate hike from the ECB next week.
- The fall in wholesale EZ gas prices is great news, but we doubt it will be sustained through winter.
- Underlying inflation pressures in the EZ remain intense, but we look for softer data in Q4.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: A glimmer of hope, but more evidence is needed to call a bottom.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: Net trade was a drag on growth in Q3, we think.
Melanie Debono (Senior Eurozone Economist)Eurozone
- 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
- A further leap in core inflation in September will push the ECB to deliver another 75bp hike next month.
- Energy inflation is now falling, slightly, but it won’t prevent the headline from rising again in September.
- Disinflation in oil products is accelerating, but gas and electricity prices still have further to rise.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: Core inflation will rise above 4% in September and October.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- The rise in inflation since the SNB’s last meeting means it will surely raise rates on September 22.
- The ECB went big last week; the SNB will follow suit as it seems happy with current franc strength.
- In Q4 we think the SNB will hike by 50bp, much less than the 125bp we expect from the ECB.
Melanie Debono (Senior Eurozone Economist)Eurozone
In one line: No signs that the gas price cap is helping industrial firms yet.
Melanie Debono (Senior Eurozone Economist)Eurozone
In one line: The start of many declines, we think.
Melanie Debono (Senior Eurozone Economist)Eurozone
- The surge in gas prices adds to our conviction that inflation will remain high, despite a hit to EZ activity.
- A probable EZ recession is weighing heavily on the outlook for Switzerland’s economy in H2.
- EZ investor sentiment tumbled in September; it will sour further as the ECB continues to hike.
Melanie Debono (Senior Eurozone Economist)Eurozone
- When the facts change, so do our forecasts; we now think the ECB will hike by 75bp next week.
- Headline inflation in the Eurozone could hit 10% in September, with core inflation at 4.5%.
- Core goods inflation is rocketing, and it likely will remain higher than implied by surveys, for a while.
Claus Vistesen (Chief Eurozone Economist)Eurozone
Soft money data rounded up a week of gloomy leading indicators for EZ GDP last week.
ISTAT data lend support to our view that Italy, along with Germany, is leading the EZ downturn in H2.
The sour data spooked some ECB members, but the ECB is not about to turn dovish.
Melanie Debono (Senior Eurozone Economist)Eurozone
