- Don't fret the July plunge in EZ retail sales; Q3 as a whole will be OK, and services will do even better.
- The risk of new virus restrictions remains low, de- spite the uptick in new cases since the end of Q2.
- Consumers' spending in services will deliver strong growth in Q3 in the major EZ economies.
Claus Vistesen (Chief Eurozone Economist)Eurozone
EZ bond yields have been dragged lower as investors have abandoned the reflation trade.
Idiosyncratic factors will weigh on bund yields in H2, but we still see room for a rise to -0.3-to-0.4% in Q4.
Energy imports, and goods demand from Eastern Europe, are weighing on Germany's trade surplus.
Claus Vistesen (Chief Eurozone Economist)Eurozone
We're raising our 2021 growth forecasts for France, mostly due to technicals linked to recent revisions.
We now think German GDP will rise by just 2.7% in 2021, but the carry-over into 2022 will be solid.
Our new Q3 forecasts are broadly in line with the consensus; all set for a spectacular quarter.
Claus Vistesen (Chief Eurozone Economist)Eurozone
The macro-fundamentals are starting to turn against equities, but the policy put is alive and well.
Even if EZ equity earnings rise by 40% over the next year, as analysts expect, they still aren't cheap.
Political risks in the G7 are now concentrated in Europe; next year's elections in France loom large
Claus Vistesen (Chief Eurozone Economist)Eurozone
From an immunological perspective, variant risk is assessed on a spectrum—no variant is either completely resistant or susceptible to the vaccines—but for markets it is binary.
Claus Vistesen (Chief Eurozone Economist)Eurozone
Data on Friday showed that money supply growth in the Eurozone slowed further midway through Q2. Broad money, M3, rose by 8.4% year-over-year in May, easing from a 9.4% increase in April.
Claus Vistesen (Chief Eurozone Economist)Eurozone
The Eurozone's external surplus rebounded at the start of Q2.
Claus Vistesen (Chief Eurozone Economist)Eurozone
EZ equities have so far delivered the goods in 2021. The MSCI EU, ex-UK, is up just under 11% year-to-date, excluding dividends.
Claus Vistesen (Chief Eurozone Economist)Eurozone
By all accounts, the ECB's promise in March to conduct PEPP purchases at a "significantly higher pace" through Q2 is turning out to be a damp squib.
Claus Vistesen (Chief Eurozone Economist)Eurozone
Yesterday was a busy day in the Eurozone and today will be even busier.
Claus Vistesen (Chief Eurozone Economist)Eurozone
The upturn in euro area manufacturing stalled midway through the first quarter.
Claus Vistesen (Chief Eurozone Economist)Eurozone
A month ago—see here—the ECB promised investors that PEPP purchases in Q2 would be "conducted at a significantly higher pace than during the first months of this year", in response to lingering near-term uncertainty in the economy, and the risk of "premature tightening of financing conditions".
Claus Vistesen (Chief Eurozone Economist)Eurozone
We are sympathetic if euro area fixed income investors are slightly confused about the ECB's intentions.
Claus Vistesen (Chief Eurozone Economist)Eurozone
Last week's speeches from key ECB officials provide clear evidence that the governing council is now slightly concerned about the increase in bond yields.
Claus Vistesen (Chief Eurozone Economist)Eurozone
Today's advance PMI data for February will confirm the status quo in the euro area economy. We reckon the composite EZ index dipped slightly, to 46.0 from 47.8 in January, driven by small declines in both services and manufacturing.
Claus Vistesen (Chief Eurozone Economist)Eurozone
