- Italian GDP rose more than we expected in Q4, forcing us to raise our forecasts for this year...
- ...Consumption will drive up GDP, which we now think will rise by 0.8% this year, the same as in 2023.
- A correction in investment is coming; a key downside risk is that it is bigger and quicker than we expect.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: Not enough for a rate cut in March; but April is still on.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: Recession in industry appears to have found a floor.
Melanie Debono (Senior Eurozone Economist)Eurozone
- Lingering votes to hike Bank Rate distract from most members’ endorsement of rate cuts this year...
- ...Two-year-ahead inflation is forecast nearer 2% under market rates than constant rates; upside skew has gone.
- We still expect the first 25bp cut to come in May, but the risks remain tilted towards a later commencement.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: Still consistent with a fall in the ECB’s 2024 inflation forecasts in March.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: EZ inflation fell in January, but less than we thought.
Melanie Debono (Senior Eurozone Economist)Eurozone
In one line: Still consistent with our EZ call; all eyes on Germany later.
Melanie Debono (Senior Eurozone Economist)Eurozone
In one line: Where was the German consumer last quarter?
Melanie Debono (Senior Eurozone Economist)Eurozone
- EZ inflation likely fell by 0.2pp in January, to 2.7%, with the core rate down 0.3pp, to 3.1%.
- The ECB remains on track to downgrade its 2024 inflation forecasts in March, by a lot.
- German retail sales plunged, again, in Q4; the fall in jobless claims in January is likely a blip.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: The EZ skirts a technical recession, again.
Melanie Debono (Senior Eurozone Economist)Eurozone
In one line: Better than expected but was it enough to prevent a decline in EZ GDP?
Melanie Debono (Senior Eurozone Economist)Eurozone
In one line: French GDP went nowhere in H2 last year.
Melanie Debono (Senior Eurozone Economist)Eurozone
- Advance GDP data show the EZ economy barely budged last year.
- Spanish inflation rose in January; we see no reason to alter our French and German calls in response...
- ...But we are revising up our EZ inflation forecast by 0.1pp to 2.4%.
Melanie Debono (Senior Eurozone Economist)Eurozone
- This week’s January inflation data will be key for the ECB’s decisions and communication in H1 2024.
- We look for a downside surprise in the EZ, but the January report is a wildcard; anything can happen.
- EZ GDP likely fell in Q4—confirming a recession— worse than the ECB predicted in December.
Claus Vistesen (Chief Eurozone Economist)Eurozone
In one line: Rebound in inflation and higher taxes hit confidence.
Melanie Debono (Senior Eurozone Economist)Eurozone
