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August’s euro-zone unemployment figures provided further tentative signs that labour market conditions are improving. … Euro-zone Unemployment (Aug. 13) & Final Manu. PMI …
1st October 2013
Silvio Berlusconi’s decision to withdraw his support for the coalition Government may not trigger elections. But the fragile political situation highlights the huge challenges that Italy faces just to make further inroads into its budget deficit, let …
30th September 2013
September’s euro-zone flash CPI figures confirmed that the ECB enjoys plenty of room to loosen monetary policy further. … Euro-zone Flash CPI …
Last week’s surprise (to most people) decision by the US Federal Reserve not to “taper” its asset purchases has some near-term benefits for the euro-zone. But it does not eliminate the longer-term challenges facing the European Central Bank. … Surveys …
September’s European Commission business and consumer survey echoed the message from other recent indicators that the euro-zone economy probably expanded again in Q3. But growth is too slow to resolve the region’s debt crisis. … Euro-zone EC Survey …
27th September 2013
The continued weakness of the euro-zone monetary data in August suggests that the pick-up in the real economy rests on fragile foundations. … Euro-zone Monetary Indicators Monitor …
26th September 2013
The firmer tone of the economic data has ruled out any change in interest rates at the ECB Governing Council meeting on 2nd October, while the US Federal Reserve’s recent communication problems will have strengthened the ECB’s resolve to keep its own …
25th September 2013
Greece and Ireland have continued to cut their budget deficits. But the fragile political situation in Italy has contributed to some budget slippage there. … Euro-zone Fiscal Monitor …
The execution of more long-term refinancing operations (LTROs) by the ECB could ease concerns over a potential liquidity crisis in the banking sector. But it could also further strengthen the pernicious links between euro-zone governments and banks. … …
24th September 2013
September’s rise in German Ifo business sentiment confirmed that the economy is recovering, but we continue to expect GDP growth to be reasonably sluggish over the coming quarters. … German Ifo Survey …
While Angela Merkel did not win enough votes to govern alone in yesterday’s election, her strong support was a clear vindication of her domestic and international policy stance so far. She is likely to end up governing as part of a grand coalition with …
23rd September 2013
September’s rise in the euro-zone’s composite PMI suggests that the bloc’s recovery continued in Q3. But there are still good reasons to worry about the economic outlook. … Euro-zone Flash PMIs …
Last week’s surprise (to most people) decision by the US Federal Reserve not to “taper” its asset purchases has some near-term benefits for the euro-zone. But it does not eliminate the longer-term challenges facing the European Central Bank. … Fed …
The Dutch labour market – once the envy of the euro-zone – will continue to shed jobs over the coming year. And as firms attempt to recover previous sharp falls in productivity, employment growth is likely to remain weak even once the economy starts …
20th September 2013
Despite the improvement in financial market conditions, continued recovery of the Swiss economy and softening of the franc, the Swiss National Bank (SNB) re-emphasised today that it intends to maintain its very supportive policy stance for the foreseeable …
19th September 2013
Although the recent rise in inflation prompted the Norges Bank to bring forward its projected hiking cycle, we think that a slowdown in the economy will prevent the Bank hiking before the end of 2014. … Norges Bank unlikely to hike before …
Although the recent rise in inflation prompted the Norges Bank to bring forward its projected hikingcycle, we think that a slowdown in the economy will prevent the Bank hiking before the end of 2014. … Norges Bank unlikely to hike before …
We don’t expect the announcement of Fed tapering to have an immediately adverse effect on the euro-zone’s financial markets and economy. But a new phase in which other central banks are starting to scale back policy support could test the ECB’s resolve to …
18th September 2013
Given the progress that the Portuguese Government has made towards cutting its borrowing, the Troika is likely to grant it at least part of its next bail-out tranche after negotiations this week. But with bond yields set to remain under upward pressure, a …
17th September 2013
Recent developments in Greece’s tourism sector suggest that the economy might record another quarterly rise in GDP in Q3. But even if this is the case, we suspect that this will not mark the start of a sustained economic recovery. … Will tourism …
German investor sentiment strengthened in September, suggesting that the economic recovery should continue, albeit at a slower pace than in Q2. But the fall in euro-zone export values in July suggests the external sector is unlikely to provide much fuel …
While the CSU, sister party to Angela Merkel’s CDU, won a clear victory in Bavaria yesterday, the poor showing for the FDP bodes ill for the current coalition at a national level. The chance of Mrs Merkel having to form a grand coalition with the SPD …
16th September 2013
Q2’s labour cost data revealed that cost growth in the euro-zone core slowed relative to that in the periphery, undermining hopes of a swift rebalancing within the bloc. … Euro-zone Labour Costs (Q2) & Final CPI …
Spain has begun to resolve some of its deep economic problems and its recession has eased. But the strong recovery needed to lower unemployment dramatically and ensure that public sector debt does not climb significantly higher is still a long way off. …
July’s French industrial production data were a blow to hopes that the economy is staging a longawaited recovery. With business surveys at low levels, consumer confidence weak, unemployment rising and house prices falling, we were not surprised to see the …
Q2’s employment data suggest that the downturn in the euro-zone labour market is coming to an end. But a significant upturn remains a distant prospect. … Euro-zone Employment …
13th September 2013
Denmark’s year-long experiment with negative deposit rates is likely to come to an end next year. But we think that markets are wrong to expect a second rate hike before the end of 2014. … When will Denmark normalise monetary …
Denmark’s year-long experiment with negative deposit rates is likely to come to an end next year. Butwe think that markets are wrong to expect a second rate hike before the end of 2014. … When will Denmark normalise monetary …
Hopes that looser or less tight fiscal policy will fuel the recovery in the euro-zone economy are unlikely to be met. For the foreseeable future, fiscal policy will remain a sizeable drag on growth. … Fiscal policy won’t fuel the euro-zone …
12th September 2013
July’s large fall in euro-zone industrial production put a serious dent in hopes that the tentative recovery underway in the region’s economy will have gathered further momentum in the current quarter. … Euro-zone Industrial Production …
Although Q2’s final Italian GDP figures painted a reasonably encouraging picture, timelier hard data, such as the French industrial production numbers for July, suggest that the euro-zone economy remains fragile and that the recovery will be weak. … …
10th September 2013
The possible coalition of Germany’s SPD, Green and Left parties after next week’s election would probably mean slightly higher taxes and spending than under the more likely alternatives of a grand coalition or a repeat of the current centre-right …
9th September 2013
The quarterly rise in Greek GDP in Q2 raises hopes that the economy has reached a turning point. But we doubt that Greece is now on the path to recovery and still think that further financial assistance and another debt restructuring will be needed to …
Last week’s data from Spain were pretty encouraging – in particular, the PMI export orders index for August suggested that Spain’s robust export recovery continued in Q3. But other data indicate that the PMI may be overstating the likely support from the …
Data for July revealing falls in German and Spanish industrial production and a deterioration of Germany and France’s trade balances support our view that the eurozone’s economic recovery will be very slow. … German & Spanish Ind. Prod./ German & French …
6th September 2013
Icelandic GDP fell sharply in Q2. But behind the headline figure, the data confirmed that the economy is still on the road to recovery, albeit a long and tortuous one. … Iceland GDP …
Icelandic GDP fell sharply in Q2. But behind the headline figure, the data confirmed that the economy is still on the road to recovery, albeit a long and tortuous one. … Iceland GDP (Q2 …
President Draghi walked a tightrope today in acknowledging the nascent recovery while at the same time trying not to raise markets’ interest rate expectations. We think that he will fulfil his pledge to keep rates low for an extended period and perhaps …
5th September 2013
The Swedish Riksbank continued to suggest that interest rate hikes are unlikely until the end of 2014. But we expect the economic recovery to be weaker than the Bank expects, implying that rates could remain on hold for rather longer. … Riksbank’s …
The ECB’s apparent success in verbally influencing the financial markets might reflect the vagueness of the central bank’s communications. But policy actions will always mean more than words. … Less could be more when it comes to forward …
4th September 2013
The euro-zone exited its record-long recession in Q2 and recent business surveys suggest that the economy should expand again in the third quarter. An increase in household spending, the first in seven quarters, was an important factor behind Q2’s 0.3% …
The breakdown of Q2 GDP and more timely news on retail sales and the final PMI brought further confirmation that the euro-zone economy has embarked on a recovery. But growth rates look set to remain pretty anaemic. … Euro-zone GDP (Q2), Final PMI (Aug.) …
The Conservative-led opposition is favourite to win the Norwegian election on the 9th September. But the party looks unlikely to tackle the economy’s twin addiction to energy exports and household debt. In fact, it may exacerbate it. … What would a new …
3rd September 2013
Swiss Q2 GDP data revealed that activity continued to pick up pretty strongly. While modest export growth is likely to mean that the recovery is not particularly rapid, a healthy domestic economy should promote steady growth in the next couple of years. …
Swiss Q2 GDP data revealed that activity continued to pick up pretty strongly. While modest export growth is likely to mean that the recovery is not particularly rapid, a healthy domestic economy should promote steady growth in the next couple of years. … …
The ECB’s OMT programme has had a successful first year. But there are still reasons to doubt that it has solved the euro-zone crisis and the programme’s effects could fade in the coming months. … Happy Birthday OMTs – it could be downhill from …
2nd September 2013
The smaller peripheral euro-zone economies continue to make solid inroads into their budget deficits. But the Italian and Spanish deficits have fallen only modestly. … Euro-zone Fiscal Monitor (Aug …
