Europe Economics Update Tiered ECB deposit rate would be a dovish signal If it is introduced (which is far from certain) a tiered deposit rate would reduce the cost of negative interest rates for banks, but it would do so by only a trivial amount. Its main purpose would be... 29th March 2019 · 3 mins read
Europe Economics Update China rebound won’t get Germany back on track Weaker Chinese demand can explain only a fraction of the slowdown in German GDP growth over the past year: softer demand in other export markets and in the euro-zone are more important factors... 28th March 2019 · 1 min read
Nordic & Swiss Economics Update How would the DNB respond to more ECB QE? If the past is anything to go by, a fresh round of ECB QE would lead to upward pressure on the Danish krone. We think Denmark’s Nationalbank would react with a combination of FX intervention and rate... 26th March 2019 · 1 min read
Europe Economics Update Spain’s economy likely to slow after general election The Spanish economy looks set to slow slightly as the effect of last year’s fiscal stimulus fades and weak growth elsewhere in the euro-zone takes a toll. That said, it will still probably be one of... 26th March 2019 · 1 min read
Nordic & Swiss Economics Update Monetary policy likely to prevent weaker NOK We are now more hawkish than the consensus about the outlook for monetary policy in Norway this year. But we don’t expect the krone to keep strengthening, as we forecast that oil prices will fall. 22nd March 2019 · 1 min read
Europe Economics Update Slowing bank lending to weigh on Italy’s economy Higher government bond yields in Italy have not fed through to increased interest rates on bank loans, and this seems unlikely to happen to any significant degree this year. Nevertheless, Italian... 21st March 2019 · 1 min read
Nordic & Swiss Economics Update Interest rate hikes in Iceland appear even less likely As we expected, weak economic data and a recent pick-up in the króna contributed to the Central Bank of Iceland leaving interest rates on hold today. While it maintained a hawkish bias in its... 20th March 2019 · 1 min read
Europe Economics Update Germany stuck in the slow lane A slow start to the year, combined with a deterioration in prospects for both export growth and household consumption, has prompted us to cut our forecast for economic growth in Germany to only 0.5%... 19th March 2019 · 1 min read
Europe Economics Update Wage growth likely to stop rising this year Euro-zone labour cost growth edged down in Q4 and, in contrast to the ECB, we don’t expect it to start rising again this year. This suggests that upward pressure on core inflation will remain muted. 19th March 2019 · 1 min read
Europe Economics Update Euro-zone’s supply chain links: smaller than assumed Supply-chain links between Germany and the manufacturing sectors of other large euro-zone countries are smaller than people tend to think. As long as the slowdown in Germany is contained primarily to... 15th March 2019 · 1 min read
Europe Economics Update TLTRO-III to support bank funding, but not economy The ECB’s new “TLTRO-III” programme should help to prevent credit conditions from tightening next year. But any boost to lending growth is likely to be small. 13th March 2019 · 1 min read
Europe Economics Update Greek recovery likely to lose pace The Greek economy looks set to expand at a modest pace this year. But next year, it will probably slow as investment continues to contract and the slowdown in the rest of the euro-zone weighs on... 13th March 2019 · 1 min read
Europe Economics Update ECB likely to be forced into more QE in 2020 We now think that a combination of sluggish economic growth, low inflation, and monetary policy loosening in the US is likely to prompt the ECB to re-launch its net asset purchases next year. 12th March 2019 · 1 min read
Nordic & Swiss Economics Update What could the SNB do to ease policy further? The more dovish than expected stance adopted by the ECB at today’s monetary policy meeting supports our view that the SNB will also keep rates lower for longer. And if the euro-zone economy... 7th March 2019 · 1 min read
Europe Economics Update Probability of more QE this year is rising The ECB did more than expected today, announcing another round of TLTROs and pledging to leave policy rates on hold at least until next year. But with economic growth and inflation likely to remain... 7th March 2019 · 1 min read
Europe Economics Update Italy’s recession likely to drag on Italy’s economy is unlikely to come out of recession in the first half of this year. Several temporary factors might lead to a small expansion in the second half of the year, but even if this happens... 5th March 2019 · 1 min read