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All peripheral economies narrowed their budget deficits in October, but Portugal is expected to miss its target for 2014 as a whole. … Euro-zone Fiscal Monitor …
2nd December 2014
The recent fall in oil prices will have some modest positive effects on the euro-zone economy. But it does not preclude the need for the European Central Bank (ECB) to provide more policy support. … Will lower oil prices do the ECB’s job for …
The likely introduction of “full-blown” quantitative easing by the ECB may well put pressure on other European central banks to follow suit and introduce their own unconventional measures in order to curb the appreciation of their currencies, protect …
1st December 2014
The fall in the euro since the spring looks likely to have at least some upward effect on both the growth of euro-zone exports and the level of euro-zone consumer price inflation. But the ECB should not conclude that the exchange rate has done its job for …
28th November 2014
The latest euro-zone consumer prices and unemployment figures gave the ECB yet another nudge to take urgent further action to revive the recovery and tackle the threat of deflation. … Euro-zone Flash CPI (Nov.) & Unemployment …
The rise in Swedish GDP in Q3 provides further evidence of a steady recovery and will help to alleviate fears of a Japanese-style bout of deflation and stagnation. But growth is not strong enough for policymakers to be complacent about deflation risks. …
The rise in Swedish GDP in Q3 provides further evidence of a steady recovery and will help to alleviate fears of a Japanese-style bout of deflation and stagnation. But growth is not strong enough for policymakers to be complacent about deflation risks. … …
It seems clear that the ECB will soon embark on a full-blown quantitative easing programme incorporating sovereign debt purchases. The key questions now are when and how big ? While we think that the contingencies for QE set out by President Draghi have …
27th November 2014
November’s fall in German inflation to a five-year low highlights the absence of price pressures in even the strongest parts of the euro-zone. And while German unemployment remains very low, this still does not seem to be affecting wage growth. … German …
October’s euro-zone monetary data highlighted the sluggish nature of the recovery in the region’s banking sector and will help to maintain the pressure on the ECB to provide further stimulus. … Euro-zone Monetary Indicators Monitor …
November’s EC business and consumer survey did nothing to relieve the pressure on the European Central Bank to provide more policy support to the euro-zone economy in the form of a full-blown quantitative easing programme. … Euro-zone EC Survey …
An ECB quantitative easing (QE) programme will probably not be decisive enough to prompt a rise in inflation expectations like that which lifted US Treasury yields during the Fed’s bouts of QE. Accordingly, core euro-zone bond yields are likely to stay …
26th November 2014
The Greek Government does not appear to have been too rattled by last month’s market turmoil, sticking to its budget plan despite opposition from the Troika. But it may come under pressure to seek faster repayment of outstanding taxes, threatening the …
25th November 2014
The second release of Q3 German GDP confirmed that the economy expanded by a meagre 0.1%. The breakdown offered some hope, with consumer spending and exports rising strongly, but surveys suggest that the recovery will be slow at best. … German GDP (Q3) …
November’s rise in the German Ifo survey is a relief after the fall in the PMI and leaves the key surveys painting a somewhat mixed picture. But both point to slow growth at best, which will do little to revive the euro-zone as a whole. … German Ifo …
24th November 2014
The objections of German Bundesbank President Jens Weidmann to the prospect of an ECB quantitative easing programme including government bond purchases are unlikely to prevent such a programme being implemented in the next few months. But along with the …
21st November 2014
EC President Jean-Claude Juncker’s proposal for a €300bn EU investment programme will probably do little more than shift existing funds around the economy with little or no positive impact on growth. … Juncker’s investment plan is unlikely to amount to …
Norway has been one of the strongest growing economies of the developed world over the last decade. But with households buckling under high debt burdens and lower oil prices set to exacerbate the decline of the energy sector, a weaker growth path lies …
20th November 2014
The renewed slowdown in the growth of Portuguese exports in recent quarters has underlined the need for the country to implement further decisive reforms in order to lift growth from the anaemic rates seen over the last decade. … Weaker Portuguese …
Q3’s reasonably solid gain in GDP maintained Norway’s position as the strongest of the Nordic economies. But signs of weaker household spending and the likely negative effects of lower oil prices point to slower growth ahead. … Norwegian GDP …
November’s fall in the euro-zone composite PMI was a serious blow to hopes that the recovery would resume towards the end of the year. … Euro-zone Flash PMIs …
Q3’s reasonably solid gain in GDP maintained Norway’s position as the strongest of the Nordic economies. But signs of weaker household spending and the likely negative effects of lower oil prices point to slower growth ahead. … Norwegian GDP (Q3 …
An effective ECB QE programme would probably involve large-scale purchases of higher-yielding and long-term debt, including both government bonds and private sector assets. But we suspect that the Bank will stick to limited purchases of short-dated bonds, …
19th November 2014
The recent drop in oil prices looks set to tip euro-zone CPI inflation into negative territory over the coming months, increasing the risk of a prolonged and damaging bout of deflation. … Falling oil prices to tip the euro-zone into …
18th November 2014
The improvement in Dutch consumer confidence and upturn in the housing market suggest that the near stagnation of consumer spending in Q3 need not be a sign of things to come. But continued fiscal austerity and the high level of household debt will ensure …
November’s rise in German ZEW investor sentiment came as a modest relief after the recent gloomy news on the euro-zone. But the index has not been very reliable in the past and it remains consistent with only a slow resumption of the German recovery. … …
While it is welcome news that the Greek economy has finally started growing again after seven years of recession, the recent GDP figures have not solved two of its, arguably biggest, problems: its huge debt burden and ongoing uncertainty about how it will …
17th November 2014
The widening of the euro-zone trade surplus to a new record in September was an encouraging sign that exporters are starting to benefit from the weaker euro. But the ECB will need to deliver on hints of quantitative easing if this boost is to be …
One notable element of last week’s euro-zone GDP figures for the third quarter was the strength of the peripheral economies, even Greece, in relation to the core. This might be seen as confirmation that the five year long euro-zone crisis, which …
14th November 2014
The small expansion in the euro-zone economy in Q3 has not diminished the need for both the European Central Bank (ECB) and national governments to respond to the persistent risk of deflation in the currency union with more decisive policy action. … …
Q3’s near stagnation of the German economy confirmed that economic weakness has spread to the core of the single currency area. While France performed marginally better, it seems that the euro-zone barely returned to growth after Q2’s stagnation. … …
Markets have probably at least partially priced in the prospect of QE in the euro-zone, suggesting that the ECB will have to unveil a bold programme to prompt a further significant market reaction. … Is QE already priced …
12th November 2014
September’s euro-zone industrial production figures confirmed that industry acted as a drag on the currency union’s economy in Q3 and pose downside risks to Friday’s euro-zone GDP figures. … Euro-zone Industrial Production …
The rise in Sweden’s headline inflation rate in October will do little to dispel fears that the country is succumbing to a damaging bout of deflation and will maintain pressure on the Riksbank to consider unconventional monetary policy measures. … …
11th November 2014
The rise in Sweden’s headline inflation rate in October will do little to dispel fears that the country is succumbing to a damaging bout of deflation and will maintain pressure on the Riksbank to consider unconventional monetary policy measures. … Swedish …
Any optimism surrounding the ECB’s progress towards QE has been dulled by concerns that the already low level of yields on many assets will make the policy ineffective. But there is still scope for QE to bring down interest rates as well as having …
10th November 2014
The ECB suggested last week that preparations are finally underway to launch full-blown quantitative easing. It seems that action will be triggered by either of two factors: evidence that existing policies will not achieve the desired €1trn balance sheet …
7th November 2014
September’s disappointing rebound in German industrial production increased the risks that both the German and euro-zone economies contracted in Q3 and added to the pressure on the ECB and German Government to provide more policy support. … German & …
Today’s statement from Mr Draghi that ECB staff are preparing further monetary policy measures provided the firmest support yet for our long-held view that the Bank will implement full-blown quantitative easing. It is now a matter of when rather than …
6th November 2014
The latest data have shown tentative signs of improvement in the euro-zone banking sector, with the pace of contraction in lending slowing slightly in September (see Chart) and the Bank Lending Survey pointing to a further loosening of credit conditions. …
5th November 2014
Iceland’s central bank unexpectedly cut its main interest rate to 5.75% today, the first change in two years, as it lowered its inflation and growth forecasts. But we think it may have to reverse course next year as strong domestic demand and labour …
October’s final composite PMI was slightly below the flash estimate and indicated that the euro-zone economy may have started Q4 on a weak note. … Euro-zone Retail Sales (Sep.) & Final PMIs …
While the extension of the Bank of Japan’s quantitative easing programme may not deliver a sharp upturn in the Japanese economy, the signal it has sent regarding the future stance of Japanese monetary policy and the corresponding impact on the yen provide …
4th November 2014
The Greek Government appears to have backtracked from plans of a “clean exit” from its EU bail-out programme in December, but it might still be over-estimating the extent to which it can finance itself in the markets and not rely on external support. … …
Fears that a referendum over the Swiss National Bank’s (SNB’s) gold holdings might prevent the Bank defending its ceiling for the Swiss franc may be overblown. But the referendum highlights political opposition to the SNB’s aggressive balance sheet …
All peripheral economies narrowed their budget deficits in September but France and Italy submitted draft budgets that flouted EU fiscal rules. … Euro-zone Fiscal Monitor …
3rd November 2014
