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As expected, both the Swedish Riksbank and Norway’s Norges Bank both held their policy rates unchanged today. Given our below-consensus outlook for both economies, we do not expect either to hike rates until 2015. … Swedish and Norwegian rates on hold …
24th October 2013
As expected, both the Swedish Riksbank and Norway’s Norges Bank both held their policy ratesunchanged today. Given our below-consensus outlook for both economies, we do not expect eitherto hike rates until 2015. … Swedish and Norwegian rates on hold until …
The rise in euro-zone consumer confidence in October adds to signs that the euro-zone recovery is gradually improving. However, we think that a strong and sustained recovery in consumer spending is still some way off. … Euro-zone Flash Consumer …
23rd October 2013
Q3’s GDP estimate from the Bank of Spain suggests that the economy has finally emerged from its two year long recession. But we doubt that the economy will generate a strong enough recovery to bring the unemployment rate and public debt down significantly …
The recent pick-up in the euro-zone economy stands in marked contrast to the accelerating contraction in bank credit. Given the importance of banks to the region, a “creditless recovery” will not be strong enough for the euro-zone to grow out of its debt …
21st October 2013
Given the recent run of positive economic news from the euro-zone, it is perhaps no surprise that the spread between Italian and German government bond yields has narrowed. But we remain concerned about the outlook for Italy and think that the recent fall …
Euro-zone policymakers took another step along the path towards banking union last week, while the resolution of the US shutdown debacle appeared to remove an external threat to the region’s fragile economic recovery. But one legacy of the episode has …
While the struggle to form a new German Government looks set to continue for another month, this does not mean that major change is afoot. Angela Merkel might make some concessions on a national minimum wage in order to form a grand coalition with the …
17th October 2013
We think that the continued strength of the franc will weigh heavily on Switzerland’s exports for some time yet. But fears of overheating in the property market seem overdone, implying that a brighter outlook for domestic spending should ensure a steady …
Euro-zone Finance Ministers made little progress on Banking Union at their summit this week. If next year’s stress tests find large holes in bank balance sheets, there is still no clear mechanism to fill them. … What will happen after next year's bank …
Ireland’s 2014 Budget presented an apparently conducive backdrop for the country’s exit from its euro-zone support programme later this year. But Ireland’s post bail-out prosperity is not yet assured. … Budget keeps Ireland on track for bail-out …
15th October 2013
Despite the euro-zone economy’s recent recovery, likely constraints on future rates of economic growth and limits to further austerity mean that more of the region’s economies could yet choose, or be forced, to turn to default as a way out of their debt …
The continued rise in ZEW investor sentiment in October suggests that the German economy is so far weathering the storm of political turmoil elsewhere. … German ZEW Survey …
Despite a rise in production in August, the euro-zone industrial sector is unlikely to have provided much of a boost to the wider economy in Q3. … Euro-zone Industrial Production (Aug …
14th October 2013
The US federal government shutdown is unlikely to have major direct effects on the European economy and financial markets provided that it is resolved fairly quickly. Nonetheless, the episode has served as a timely reminder that euro-zone policymakers …
Speculation has risen in recent weeks that Slovenia will be forced into some form of euro-zone bailout. But the country can still avoid asking for outside help in dealing with its banking crisis. … Slovenia can still save itself from a …
11th October 2013
The latest industrial figures heighten the risk that both the French and Italian economies contracted in Q3, confirming that the euro-zone’s recovery is strongly reliant on Germany. … French & Italian Ind. Production …
10th October 2013
Despite the sharp rise in production in August, the German industrial sector will provide the wider economy with a slightly smaller boost in Q3 than Q2. … German Industrial Production …
9th October 2013
The European economy has shown further signs of recovery, with the euro-zone finally emerging from recession in the second quarter and other parts of the continent also faring better. But growth in the peripheral countries of the currency union looks set …
8th October 2013
Evidence mounted last week that euro-zone unemployment has peaked. Particularly encouragingly, many of the peripheral economies have now enjoyed several months of falling unemployment. What’s more, employment growth in the region is likely to pick up over …
7th October 2013
President Draghi struck a cautiously optimistic tone about the euro-zone’s nascent recovery. But while he made it clear that the ECB stands ready to prevent excessive rises in market interest rates, there was little sign that further imminent action to …
2nd October 2013
The fall in euro-zone CPI inflation to 1.1% in September – its lowest rate since February 2010 – leaves it well below the ECB’s target of “below, but close to, 2%”. While falling energy inflation has played an important role, core inflation has also …
A contentious component of the Greek bail-out package has been its privatisation programme. This Update summarises some of the views expressed at a panel discussion in which Ben May was involved at the Euromoney “Greece Privatisation and Investment Forum” …
1st October 2013
August’s euro-zone unemployment figures provided further tentative signs that labour market conditions are improving. … Euro-zone Unemployment (Aug. 13) & Final Manu. PMI …
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
