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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 …
13th September 2013
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 …
Data released last week point to a brightening near-term outlook for euro-zone households, suggesting that consumption growth will gather pace in Q3. But given that a meaningful recovery in the labour market remains a fairly distant prospect, consumption …
August’s EC survey added to evidence of a moderate recovery in the euro-zone, but July’s unemployment figures confirm that this is not yet boosting the labour market. … Euro-zone EC Survey & CPI (Aug.)/ Unemployment (Jul …
30th August 2013
The Danish economy grew at a decent clip in Q2 on the back of strong export growth, but household deleveraging means that growth over the coming year will fall short of consensus forecasts. … Danish GDP …
The Danish economy grew at a decent clip in Q2 on the back of strong exportg rowth, but household deleveraging means that growth over the coming year will fall short of consensus forecasts. … Danish GDP (Q2 …
While the recent improvement in the euro-zone’s economic prospects suggests that a further cut in interest rates is unlikely in the near future, President Draghi will no doubt repeat the relatively vague pledge to keep rates at or below present levels for …
29th August 2013
The continued weakness of the euro-zone monetary data in July suggests that the pick-up in the real economy rests on fragile foundations. … Euro-zone Monetary Indicators Monitor …
28th August 2013
The euro-zone’s nascent recovery is unlikely to prompt a significant improvement in labour market conditions for quite some time. This suggests that wage growth and consumer spending will remain subdued and political and social tensions related to high …
27th August 2013
August’s sharper-than-expected rise in German Ifo business sentiment added to the recent encouraging signs that the economy is recovering. … German Ifo Survey …
German Finance Minister Wolfgang Schäuble’s acknowledgement last week that Greece needs more aid seemed like a statement of the obvious. Encouragingly, however the size of any new bail-out will be small beer in comparison to the €240bn that has already …
26th August 2013
The second release of Q2 German GDP confirmed that the economy expanded by an encouraging 0.7%. But while the recovery should continue, a closer look at the data suggests that the pace of growth will slow in the months ahead. … German GDP Breakdown …
23rd August 2013
Iceland is well on the way to recovery. But legacy problems from its 2008 crisis will hang over the economy for some time yet, preventing GDP from regaining its pre-crisis high until 2015. … Iceland on long and winding road to …
22nd August 2013
By 2014, the Netherlands will have seen an unprecedented fall in household spending. The resulting weakness in the Dutch economy will undermine attempts to address euro-zone imbalances, while beleaguered Dutch voters may harden their opposition to …
August’s flash euro-zone PMIs provided further evidence that the currency union’s economy continued to expand in the third quarter, albeit at a pretty modest pace. … Euro-zone Flash PMIs …
The limited rise in euro-zone market interest rates might suggest that the ECB’s forward guidance is working. But it would be premature to conclude that the central bank can continue to protect the recovery from adverse market forces. … Is the ECB’s …
21st August 2013
Despite the recent upward revision to our forecast for Italian GDP growth, we still think that the Government’s budget deficit and debt forecasts are too sanguine. … Italy’s debt dynamics still look …
The recent return of economic growth in the euro-zone does not eradicate the risk that some of the peripheral economies will undertake some form of sovereign default. … Return to growth won’t eliminate euro-zone default …
20th August 2013
The mainland Norwegian economy slowed quite sharply in Q2 as a result of faltering household spending, supporting our long-held view that the economy will slow over the coming year. … Norwegian GDP …
The mainland Norwegian economy slowed quite sharply in Q2 as a result of faltering household spending, supporting our long-held view that the economy will slow over the coming year. … Norwegian GDP (Q2 …
Slovenia’s large export sector is faring rather well, supporting the country’s efforts to avoid a bail-out from the euro-zone. But exporters alone will not save Slovenia. Rather, the Government needs to be more ambitious in dealing with the country’s …
19th August 2013
While the second quarter’s 0.3% expansion in euro-zone GDP may partly have reflected temporary factors, there seems little reason to doubt that the region’s record-long recession is finally at an end. But with the improvement driven largely by the …
The rise in euro-zone GDP in Q2, coupled with the improvements in the key business surveys, confirms that a turning point in the business cycle has been reached. But these developments do not guarantee that the euro-zone is on the cusp of a healthy and …
15th August 2013
Q2’s 0.5% quarterly rise in French GDP, which was the strongest in over two years, has prompted optimism that the economy has finally joined Germany on a path to solid growth. But while we have revised up our forecasts, we still think that it is much too …
The return to modest rates of economic growth in the euro-zone as a whole won’t address the deep-seated economic and fiscal problems of the peripheral countries. … Euro-zone GDP …
14th August 2013
Germany seems set to introduce a national minimum wage after September’s election. But it will probably do little to boost German consumer spending or to rebalance the euro-zone more generally. … German minimum wage won’t rebalance the …
13th August 2013
June’s euro-zone industrial production data and August’s German ZEW survey provide further signs that the euro-zone has emerged from recession. … Euro-zone Industrial Prod. (Jun.) & German ZEW Survey …
