Europe Economics Update What next for France? The results of France’s parliamentary elections mean it should avoid the large, unfunded fiscal expansion that two of the three major political groups were advocating. But it also means France is very... 8th July 2024 · 9 mins read
Europe Economics Update German budget deal only moderately encouraging The budget deal struck by the governing coalition in Germany reduces the risk of the country being forced into early elections. But it does little to address Germany’s structural problems, in part... 8th July 2024 · 3 mins read
Europe Economics Update Germany no longer immune to budget trouble Much of the recent focus has been on France’s political turmoil, but Germany has had its own troubles with disagreement over the 2025 budget threatening the survival of the governing coalition. While... 1st July 2024 · 4 mins read
Europe Economics Update First round results of France’s parliamentary election The preliminary results of the first round of voting are broadly in line with the final opinion polls, showing that Emmanuel Macron’s centrist coalition has lost out to both the left and right. But a... 30th June 2024 · 3 mins read
FX Markets Update Assessing French election risk for the euro The upcoming French election continues to loom over euro-zone financial markets and the euro. We think it would take a worst case scenario in which France’s fiscal outlook worsens materially to... 27th June 2024 · 4 mins read
Europe Economics Update Money and lending growth likely to remain slow May’s data show a continued gradual increase in money and lending growth, though both remain slow. While the ECB’s loosening cycle is now underway, money and lending growth are set to remain subdued. 27th June 2024 · 2 mins read
Europe Economics Update How might the ECB respond to a French fiscal crisis? If the results of France’s election, or actions of the next French government, trigger contagion to other euro-zone countries’ bond markets, the ECB could respond by purchasing their bonds using the... 25th June 2024 · 5 mins read
Europe Economics Update Q&A on French election: politics, economics, markets This Update summarises the answers to some of the questions which clients raised in our recent online briefing about the forthcoming French legislative elections. The questions are divided into three... 24th June 2024 · 8 mins read
Europe Economics Update Netherlands set to outperform the euro-zone average With all eyes on France, it is easy to forget that the Netherlands has also been experiencing political disruption over the last 12 months. But politics there has proved less disruptive to markets and... 21st June 2024 · 4 mins read
Europe Economics Update Riksbank to leave rates and guidance unchanged Having cut the policy rate by 25bp at its last meeting, we think the Riksbank will stick with its guidance that it will keep rates on hold next week. But with inflation likely to fall below 2% in the... 20th June 2024 · 5 mins read
Europe Economics Update French bond sell-off could get worse We see three scenarios for French fiscal policy in the coming months. Even in the best case the spread of French over German bond yields remains higher than before Macron called an early election. In... 20th June 2024 · 4 mins read
Europe Economics Update SNB cuts rates again, but likely to be last one this year The SNB’s decision to cut the policy rate from 1.5% to 1.25% was probably more influenced by the appreciation of the franc over the last two months than any perceived easing in domestic inflation... 20th June 2024 · 3 mins read
Global Markets Update Political uncertainty to keep euro-zone spreads higher We expect political uncertainty in France to maintain a floor under government bond spreads in the near term, not only in France but also in other vulnerable euro-zone countries. Further ahead, we see... 19th June 2024 · 4 mins read
Europe Economics Update A little good news under the hood of services inflation Data released this morning suggest that May’s surprisingly large jump in euro-zone services inflation may have been due to the most unlikely of culprits: Taylor Swift. So to some extent, the ECB can... 18th June 2024 · 4 mins read
Europe Economics Update SNB to keep rates on hold for rest of the year The SNB is likely to keep rates on hold at 1.5% at its meeting next week as inflation in Q2 so far has been in line with the its forecast in March. Moreover, the latest data on wage growth were much... 13th June 2024 · 5 mins read
Europe Economics Update Norges Bank to stick to hawkish tone Norges Bank will leave its policy rate at 4.5% next week and reiterate that rate cuts are some way off. We think it will wait until December to start loosening monetary policy. 13th June 2024 · 2 mins read
