- 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
- EZ inflation is running hot, and it will rise further in Q4; will markets and the ECB flinch?
- German unemployment fell further midway through Q3, and further improvement is in store.
- Consumers' spending, ex-services, in France dipped in July, but Q3 as a whole will be decent.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- Core inflation in the euro area rocketed in August, but we doubt that markets will notice.
- PEPP tapering is coming, but the overall tenor of the ECB's communication remains as dovish as ever.
- The EZ survey data are now softening, but that won't matter for GDP in Q3; for Q4, however, it might.
Claus Vistesen (Chief Eurozone Economist)Eurozone
- The second Q2 GDP estimate for the EZ will confirm the advance report while we are away.
- Detailed GDP data in Germany will show that consumers' spending rocketed in Q2.
- We look for soft surveys for August, but we still think Q3 as a whole will be great for the EZ economy.
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
The PMIs confirm that the Q2 upturn in services continued at the start of the third quarter.
Data in France and Spain suggest that hospitality came roaring back in Q2; more to come in Q3.
EZ retail sales jumped by 3.4% in Q2; growth will slow in Q3, but should remain robust.
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
Raft of Swiss data reaffirm our view that the economy is recovering quicker than the Eurozone.
The pick-up in Swiss inflation in July is nowhere near enough to set alarm bells off at the SNB...
... but a stronger franc all but cements the need for higher FX intervention.
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
Robust M1 growth points to solid GDP growth in the Eurozone, once the dust settles from reopening.
Loan growth is slowing, but that's mainly due to base effects; the underlying trend remains robust.
Non-financial firms are substituting short-term for long-term lending, a good sign for investment.
Claus Vistesen (Chief Eurozone Economist)Eurozone
The PMIs point to a sustained, and strong, expan- sion in EZ economic activity at the start of Q3.
The renewed surge in virus cases is a threat to the lofty consensus Q3 forecast.
The EZ budget deficit remained wide in Q1, but it will come down as the economy recovers.
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
Earlier this week we delved into German and French inflation data, looking for signs of supply-side price pressures in goods prices, and a reopening bump in Covid-sensitive prices.
Claus Vistesen (Chief Eurozone Economist)Eurozone
Virus cases fell throughout the second quarter, allowing EZ governments to ease restrictions and the economy to roar back to life.
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
We recently wrote about the prospects of a reopening leap in core inflation—see here—as the restrictions are eased.
Claus Vistesen (Chief Eurozone Economist)Eurozone
Industry in the euro area remained red hot at the end of Q2.
Claus Vistesen (Chief Eurozone Economist)Eurozone
Data yesterday revealed that inflation in Germany eased slightly at the end of Q2.
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
