Nordic & Swiss Economics Update Swiss manufacturing “strength” masks ailing sectors Most of the recent outperformance of Switzerland’s manufacturing sector relative to Germany’s reflects strong growth in pharmaceuticals. But this has masked struggles in more Germany-facing sectors. 26th September 2019 · 2 mins read
Nordic & Swiss Economics Update Currency ceiling to come back into the SNB’s toolkit Given that the SNB’s policy rate is already at -0.75%, fears of hitting the so-called ‘reversal rate’ are likely to make it unwilling to cut rates much further. With the ECB once again in easing mode... 25th September 2019 · 6 mins read
Europe Economics Update Euro-zone economy to slow, forcing ECB to do more We are cutting our forecast for euro-zone GDP growth in 2020 and expect inflation to stay close to 1%. Moreover, we think the ECB will revise its inflation target in the coming months, then cut its... 24th September 2019 · 5 mins read
Nordic & Swiss Economics Update A closer look at the SNB’s new tiering system The changes to the SNB’s tiering system, announced yesterday, are even more generous to domestic banks than they initially appear, and will help to ‘sugar the pill’ ahead of a probable rate cut. 20th September 2019 · 3 mins read
Europe Economics Update TLTROs won’t turn the economy around The surprisingly low uptake of the ECB’s TLTROs today was probably a one-off, and uptake in December is likely to be stronger. But even if it is, we doubt that this will provide much of a boost to the... 19th September 2019 · 3 mins read
Nordic & Swiss Economics Update Norway bucks the dovish trend for the last time This morning’s decision by the Norges Bank to raise its key policy rate by 25bps, to 1.50%, was is in stark contrast to the rate cuts delivered by the Fed and the ECB over the past week. Nonetheless... 19th September 2019 · 3 mins read
Nordic & Swiss Economics Update More generous tiering system paves way for rate cut Given that the Swiss National Bank last changed its policy stance in January 2015, this morning’s decision to leave its policy rate on hold at -0.75% came as no surprise to us. But its tweak to make... 19th September 2019 · 3 mins read
Europe Economics Update Wishful thinking about German fiscal policy While far from certain, there is a growing chance that the German government announces a fiscal stimulus in the coming weeks or months. However, even if it does, we think any boost to demand would be... 19th September 2019 · 3 mins read
Europe Economics Update French industry looks resilient to German slowdown We expect French industrial production growth to slow in the coming year or so. But it should continue to outperform German industry thanks to its focus on less cyclical products such as food, energy... 18th September 2019 · 3 mins read
Europe Economics Update Italy’s citizenship income to give small boost to GDP The “citizenship income” payment will boost Italy’s GDP growth next year by only about 0.1%, in part because take-up has been lower than predicted. While this also lowers the cost of the policy, the... 18th September 2019 · 3 mins read
Nordic & Swiss Economics Update Rising unemployment heaps pressure on the Riksbank The sharp rise in Swedish unemployment in August serves as further evidence that the Riksbank is unlikely to be able to tighten policy later this year, as it forecasts. 17th September 2019 · 3 mins read
Europe Economics Update Services sector will continue to slow The euro-zone’s manufacturing downturn has dragged services growth lower this year. And with both employment and wage growth weakening, services will probably slow a little further next year. 17th September 2019 · 3 mins read
Nordic & Swiss Economics Update DNB mirrors the ECB as the SNB watches on Having mirrored the ECB’s 10bp interest rate cut this afternoon, we now expect the Danish Nationalbank to reduce its Certificates of Deposit rate again by the end of the year. Meanwhile, although the... 12th September 2019 · 3 mins read
Europe Economics Update Open-ended QE unlikely to reboot economy With today’s policy decision, Mario Draghi appears to have locked the ECB into QE for several years beyond his time in office. While the move was initially welcomed by financial markets, we doubt that... 12th September 2019 · 3 mins read
Nordic & Swiss Economics Update Riksbank is still well behind the curve The decision by the Riksbank to leave its repo rate on hold at 0.25% this morning was never really in doubt. However, its hawkish tone and cautious approach to cutting its forecasts for the repo rate... 5th September 2019 · 3 mins read
Nordic & Swiss Economics Update Investors are right to price in looser policy in Sweden The fact that investors are now pricing in looser monetary policy in Sweden highlights the extent to which the Riksbank has fallen behind the curve. Anything less than a substantial dovish shift in... 4th September 2019 · 4 mins read
