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The renewed fall in the euro-zone manufacturing PMI in December underlined the weakness of activity in the region at the end of last year. 2013 looks set to be another very challenging year for the single currency area. … Euro-zone Final Manufacturing PMI …
2nd January 2013
The European Central Bank’s promises helped to prevent Armageddon in the euro-zone in 2012. But it will have to put its money where its mouth is in 2013 and the risk of disappointment is high. Meanwhile, the political and economic environments will remain …
24th December 2012
The intervention of the European Central Bank helped to prevent the euro-zone debt crisis from escalating further in 2012. But the currency union still faces a number of major challenges in 2013. … 2013: Another challenging year for the …
20th December 2012
The narrowing of the southern euro-zone economies’ current account deficits implies that economic imbalances within the region are shrinking. But the rebalancing process is far from complete. … How encouraging are recent current account …
19th December 2012
December’s small rise in the German Ifo business survey is moderately encouraging news. But the index still points to economic stagnation in the near term. … German Ifo Survey …
Our fears that 2012 could be the “crunch year” for the euro-zone were not borne out – barring catastrophe in the next week or so! However, the fact that the economic news has been largely as we anticipated suggests that the day of reckoning might merely …
18th December 2012
Ireland’s small rise in GDP in the third quarter underlined its status as the healthiest of the euro-zone’s peripheral economies. But it still faces considerable challenges in 2013 and beyond. … Ireland GDP …
Given the dubious benefits and possible costs of cutting deposit rates below zero, we still see ECB interest rates remaining on hold for the foreseeable future. … Negative ECB rates might do more harm than …
We doubt that the latest interest rate reduction by the Swedish Riksbank will be the last in the current cycle. While the Bank has concerns about the longer-term effects of a prolonged period of low interest rates, renewed problems in the euro-zone may …
October’s euro-zone trade data confirmed that the region continues to run a large trade surplus by historical standards. But the recent fall in exports is another reason to believe that the consensus forecast for GDP growth in 2013 is too optimistic. … …
17th December 2012
The European Council finally managed to reach some important compromises last week, allowing progress to be made towards setting up an EU-wide bank supervisor in the form of the ECB. But, presumably due to German insistence, the ECB will supervise only …
Despite rising for a second month running in December, the euro-zone composite PMI remained well below the “no-change” level, consistent with a deepening recession in Q4. … Euro-zone Flash PMIs (Dec.), Final CPI (Nov.) & Emp. …
14th December 2012
The news that Greece will get its next and long-awaited bail-out loan payment within days will provide Greek and euro-zone policymakers with a bit of breathing space. But we doubt that this will bring a period of lasting calm. … How long will the Greek …
13th December 2012
October’s euro-zone industrial production data provided further strong evidence that the recession in the single currency area has deepened in the fourth quarter. … Euro-zone Industrial Production (Oct. …
12th December 2012
Recent actions by euro-zone policymakers and the ECB in particular have prompted some commentators to conclude that the region has turned a corner. But we still expect the crisis to deepen again soon, perhaps resulting in the start of some form of …
11th December 2012
December’s rise in ZEW investor sentiment provides only limited hope for the German economy given clear signs of a downturn in the recent hard data and the latest developments in Greece and Italy. … German ZEW Survey (Dec. …
The intended resignation of Italian technocrat Prime Minister Mario Monti is a timely reminder thatthe euro-zone debt crisis still goes way beyond the problems of Greece. … Italy back in the …
10th December 2012
October’ trade and industrial production figures for the euro-zone’s largest three economies brought further evidence that the recession in the region will deepen in the fourth quarter and that it has spread to the core countries. … German Trade/French & …
Suggestions that last week’s downgrades to the ECB’s economic projections have left it too gloomy look wide of the mark. Against a background of weak global activity, continued austerity and high and rising unemployment across large parts of the region, …
The further drop in industrial production in October to its lowest level in two decades raises the chances of a triple dip recession in the wider economy. … German Industrial Production …
7th December 2012
At its press conference today, the ECB again refused to make any firm commitments about the amount of support that it might be prepared to offer the Spanish Government if it requested a bailout. And while the Bank conceded that euro-zone GDP is likely to …
6th December 2012
The breakdown of euro-zone GDP in the third quarter brought little cause for optimism regarding the outlook for the region. With timelier indicators giving a universally negative picture, the recession is set to deepen in Q4 and beyond. … Euro-zone GDP …
Recent hard data have confirmed that euro-zone GDP fell for a second quarter running in Q3 and more timely indicators suggest that the recession deepened in the fourth quarter. September’s drop in industrial production showed that activity weakened as Q3 …
5th December 2012
Credit Suisse’s announcement that it will charge other banks for holding large Swiss franc deposits with it has helped to ease the pressure on the currency for now. But while we have revised down our near-term forecast for the franc, we still see it …
4th December 2012
While early signs indicate that Greece’s debt buyback will be a success, it will not bring an end to the country’s fiscal crisis. … Debt buyback won't transform Greece's fiscal …
Credit Suisse’s announcement that it will charge other banks for holding large Swiss franc deposits with it has helped to ease the pressure on the currency for now. But while we have revised down our near term forecast for the franc, we still see it …
Contrary to some suggestions, there are good reasons to think that, beyond the initial economic andfinancial disruption caused by an exit from the euro-zone, most of the current peripheral economieswould fare relatively well outside the currency union. … …
3rd December 2012
Last week’s bail-out agreement has prompted some commentators to suggest that Greece’s future in the euro-zone should now be secure until at least next autumn. But we are not convinced. Indeed, given the doubts over the effectiveness of the debt buyback …
The latest news on the euro-zone labour market and inflation further underlined the general weakness of the region’s economy. … Euro-zone Unemployment (Oct.) & Flash CPI …
30th November 2012
Having boldly pledged to do whatever it takes to save the euro back in the summer, ECB President Mario Draghi has struck a noticeably more cautious tone over recent months. We expect more of the same at the post-Governing Council meeting press conference …
29th November 2012
Sharp appreciations in the euro-zone’s core countries would threaten to damage their exports and GDP in the event of a euro-zone break-up. But there are various policies that could be implemented to stimulate domestic spending, which might even make them …
Although Greece, Portugal and Ireland are making some fiscal progress, Italy and Spain are still struggling to cut their budget deficits … Euro-zone Fiscal Monitor …
November’s EC consumer and business survey does not alter our view that the consensus forecast for the euro-zone economy broadly to stagnate in 2013 is far too optimistic. A deep recession still looks likely. … Euro-zone EC Survey …
Swiss and Swedish GDP figures for Q3 showed that the two economies remained resilient despite the euro-zone’s troubles. But while both may avoid deep recessions next year, we expect growth to be much weaker than the consensus forecasts. … Swiss & Swedish …
The latest euro-zone monetary data revealed a further small acceleration in the growth of money and bank lending in the region. But weak credit growth remains a major constraint on economic activity inside the single currency area. … Euro-zone Monetary …
28th November 2012
Euro-zone policymakers have found a bit more money down the back of the sofa to buy another sticking plaster for Greece. But the relatively easy options are running out fast. … Greek deal delays the day of …
27th November 2012
Euro-zone finance ministers are inching ever closer to a deal on the bail-out which will satisfy their own debt sustainability criteria and in the near term at least avoid a politically troublesome official sector debt restructuring. … Another Greek …
26th November 2012
This report is only available as a PDF. Click to download. … German Ifo Survey (Nov.) & GDP Breakdown (Q3) …
23rd November 2012
The news that Cyprus is about to run out of money has given a dangerous new angle to the euro-zone crisis. The economy is so small that a bail-out would be very cheap, but the Government will be particularly reluctant to accept the conditions on which …
22nd November 2012
The slight rise in the flash euro-zone composite purchasing managers’ index (PMI) in November clearly does nothing to alter our view that the recession has intensified in Q4. … Euro-zone Flash PMIs …
A euro-zone break-up would see the re-instated domestic currencies of the region’s core economies appreciate sharply. Without appropriate policy action, the resulting damage to exports would more than offset the boost to consumer spending from falling …
20th November 2012
Despite the fall in overall GDP in Q3, Norway is still weathering the euro-zone debt crisis rather well. … Norwegian GDP (Q3) …
The direct effect of the latest downgrade of France should be modest. But it threatens to deepen the political rift between France and Germany, making policies to tackle the euro-zone’s debt crisis more difficult to agree. And by increasing the pressure …
Despite the fall in overall GDP in Q3, Norway is still weathering the euro-zone debt crisis rather well. … Norwegian GDP (Q3 12) …
Last week’s euro-zone economic data brought some reasons for hope. While GDP in the region as a whole fell for the second quarter running in Q3, both Germany and France posted modest expansions, perhaps suggesting that the two might yet drag the rest of …
19th November 2012
Q3’s GDP data confirmed that, despite continued growth in Germany and France, the euro-zone as a whole is now officially in recession. We expect the recession to deepen markedly in the coming quarters. … Euro-zone GDP (Q3 …
15th November 2012
September’s plunge in euro-zone industrial production and the weak Greek and Portuguese Q3 GDP data provided additional firm evidence that the region’s economic problems continue to mount. … Euro-zone Ind. Prod. (Sep.) & Greek & Portuguese GDP …
14th November 2012
We suspect that policymakers may find a way to meet the estimated increase in Greece’s borrowing needs for the remainder of its bail-out deal without providing bigger loans. But if the economic forecasts on which the revised programme are based turn out …
13th November 2012
