Nordic & Swiss Economics Update SNB does what it can with its little ammunition left While the Swiss National Bank left its key policy rate on hold at -0.75% this morning, it made all the right noises by making its exemptions to the banking sector from negative interest rates even... 19th March 2020 · 3 mins read
Europe Economics Update Additional €750bn of QE will not be ECB’s last move The ECB announced late yesterday evening a new €750bn programme of bond purchases which is intended to contain borrowing costs for southern economies. This gives it a lot more firepower which should... 19th March 2020 · 3 mins read
Europe Economics Update Fiscal costs of virus could easily top 10-15% of GDP The combination of the government responses to the coronavirus and the slump in economic activity will cause euro-zone budget balances to deteriorate by at least 10-15% of GDP this year. While this... 18th March 2020 · 6 mins read
Europe Economics Update Banking risks add to pressure on ECB to act quickly The economic slump in the euro-zone increasingly threatens to trigger a wider financial sector crisis. In order to head off the risks to the banking sector, the ECB will need to provide unequivocal... 18th March 2020 · 3 mins read
Europe Economics Update EZ facing more than 10% quarterly slump in GDP With the euro-zone economy set to contract by 10-15% q/q in Q2 as numerous businesses come to a standstill, governments will have no choice but to provide support to businesses and households on an... 17th March 2020 · 4 mins read
Europe Economics Update ECB will be forced into more drastic action Last week’s ECB decision gave it more ammunition to combat the fallout from the coronavirus, but it will not be enough. We now think the Bank will soon make an explicit commitment to keep sovereign... 16th March 2020 · 3 mins read
Europe Economics Update Border controls are creeping up the policy agenda While the widespread re-introduction of border controls in Europe does not seem likely at present, it is possible that more governments turn to them as part of a wider policy response against the... 13th March 2020 · 3 mins read
Europe Economics Update ECB response highlights EZ policy weakness The measures unveiled by the ECB today were as substantial as expected. But, along with Ms Lagarde’s comments, they underlined that the ECB has little firepower left, that there has been no... 12th March 2020 · 3 mins read
Europe Economics Update How big a risk is Covid-19 to euro-zone banks? The coronavirus poses a significant risk to euro-zone banks. Based on our current forecast for a 1% or so decline in GDP this year, loan losses would be manageable. But a much deeper recession may... 11th March 2020 · 4 mins read
Nordic & Swiss Economics Update How big a threat is COVID-19 to Swiss insurers? As it stands, we think that the direct impact of the coronavirus on the Swiss insurance industry is likely to be manageable. However, the indirect impact from lower-for-longer bond yields will only... 10th March 2020 · 4 mins read
Europe Economics Update Which EZ economies will the coronavirus hit hardest? The spread of the coronavirus to Europe means that it is household spending and tourism that are likely to be hardest hit in the coming months, rather supply chains and exports, which initially... 10th March 2020 · 2 mins read
Europe Economics Update EZ heading for a sharp but (probably) short recession In the current circumstances, any economic forecasts come with a huge pinch of salt. But we now think the euro-zone economy will experience a deep slump in Q2 this year, causing GDP to decline by more... 10th March 2020 · 6 mins read
Europe Economics Update Italian quarantine to cause deeper downturn As a share of the population, Italy already has double the number of coronavirus cases as China, and the entire country is now in quarantine. We think that this is likely to cause its economy to... 10th March 2020 · 5 mins read
Nordic & Swiss Economics Update Repo rate cut to be the Riksbank’s first port of call Against a backdrop of rising pressure on major central banks to loosen policy in response to coronavirus, we now forecast the Riksbank to cut its repo rate back into negative territory at its 28th... 9th March 2020 · 4 mins read
Europe Economics Update Italian GDP likely to contract in Q1 and Q2 The response by policymakers, households and firms to the spread of the coronavirus looks set to take a heavy toll on Italy’s economy. We suspect that GDP will contract in both Q1 and Q2, and that... 5th March 2020 · 3 mins read
Nordic & Swiss Economics Update Swiss GDP likely to contract in Q2 The stronger-than-expected increase in Swiss GDP growth in Q4 provides a higher base for annual growth rates at the start of this year than we had previously assumed. Nonetheless, following the surge... 3rd March 2020 · 3 mins read
