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Worries about the Greek debt deal were offset last week by greater optimism towards Germany. Not only were there further signs of a pick-up in the economy, but Angela Merkel hinted that she would be prepared to sanction a bigger bail-out fund. But even if …
30th January 2012
Recent monetary data have revealed that the ECB’s generous lending has helped to reduce strains in interbank markets to some extent. However, money and credit growth have weakened further. … Euro-zone Monetary Indicators Monitor …
27th January 2012
January’s rise in the German Ifo index suggests that the economy is holding up relatively well, but activity is nowhere near strong enough to provide a meaningful boost to the euro-zone’s periphery. … German Ifo Survey …
25th January 2012
January’s increase in the euro-zone composite PMI is certainly an encouraging sign, but the survey still suggests that the region is in recession. … Euro-zone Flash PMIs …
24th January 2012
The Greek government appears to be close to agreeing a deal with bond-holders which should both reduce its debt burden and ensure that it gets its second bail-out in time to finance the redemption of some €14bn of bonds towards the end of March. … Greek …
23rd January 2012
Media reports suggest that Greece may be on the brink of agreeing a debt restructuring deal with private sector creditors. But while this might reduce the chance of a near-term disorderly default, concerns about Greece’s solvency will remain. … Debt …
19th January 2012
January’s sharp monthly rise in the German ZEW index is certainly an encouraging sign, but the index still points to tough times ahead. … German ZEW Survey (Jan.) & Euro-zone Final CPI …
17th January 2012
Last week’s news on the euro-zone continued the slightly more positive tone of late. Germany and France reiterated their commitment to a new fiscal compact, Spanish and Italian bond auctions were successful, and the euro fell to an 18 month low. But while …
16th January 2012
The ECB today maintained both the level of official interest rates and its opposition to calls for it to take more decisive action to tackle the euro-zone’s debt crisis. … ECB stands firm on bond …
12th January 2012
November’s euro-zone industrial production data provided further evidence that the economy as a whole may have fallen back into recession in Q4. … Euro-zone Industrial Production …
Some of the euro-zone’s survey indicators have ticked up in the past month. However, they almost unanimously warn of a renewed recession in the region, with the composite PMI, for example, pointing to quarterly falls in euro-zone GDP of nearly 1%. What’s …
11th January 2012
Merkel and Sarkozy’s pledge to accelerate their contributions to the euro-zone’s bail-out fund following today’s summit was vaguely encouraging. But far more striking was their lukewarm support for Greece and concession that keeping the euro-zone together …
9th January 2012
November’s fall in German industrial production confirmed that the recovery in what had been the strongest sector of the euro-zone’s strongest economy has gone into reverse. … German Industrial Production & Trade …
A new year may have begun, but it has not provided the euro-zone with a fresh start. The latest economic data confirm that the economy remains in a precarious position and the euro has continued to weaken. What’s more, the euro could start to fall more …
December’s fall in the EC survey of euro-zone economic sentiment, together with November’s drop in retail sales and the still high rate of unemployment, confirms that the euro-zone economy is in a very bad state. … Euro-zone EC Survey (Dec.), Unemployment …
6th January 2012
After two consecutive cuts in interest rates, the European Central Bank (ECB) looks set to hold fire at its first policy meeting of 2012 on January 12th. And while further interest rate cuts are still possible in later months, President Draghi is likely …
The latest fiscal data add to evidence that the ongoing austerity programmes in Southern Europe have failed to narrow these economies’ budget deficits as quickly as expected. … Euro-zone Fiscal Monitor …
4th January 2012
The latest euro-zone inflation and PMI business activity data do nothing to alter our view that the euro-zone is set for another very tough year in 2012. … Euro-zone Flash CPI & Final PMI …
Recent monetary data have revealed that money and credit growth remain very subdued. The ECB’s latest efforts to improve commercial banks’ liquidity seem unlikely to have a meaningful impact on lending to the wider economy. … Euro-zone Monetary Indicators …
3rd January 2012
With the euro-zone debt crisis ending the year much deeper and broader than it started it, it seems unlikely that the next 12 months will see a repeat of the (just about) “muddling through” process seen in 2011. Rather, 2012 looks like being the crunch …
22nd December 2011
The recent rise in some of the German business surveys has prompted optimistic media reports about Germany saving the euro-zone, acting as Santa, being a twinkling Christmas star in the euro-zone gloom etc. We are sorry to say that, whichever way we look …
21st December 2011
Italy’s Q3 GDP figures add to evidence that the economy has probably already re-entered recession, despite the fact that the fiscal squeeze there has barely started. With the economy set to contract further in 2012, the recent drop in Italian bond yields …
The Swedish Riksbank’s decision to reduce interest rates is a timely reminder that even the strongest performing European economies are not immune from the effects of the euro-zone debt crisis. We expect further rate cuts next year as the euro-zone’s woes …
20th December 2011
The small rise in the German Ifo index in December was a welcome surprise, but it hardly transforms the outlook for the economy. … German Ifo Survey …
The immediate, mechanical effect of a French credit rating downgrade might not be too severe as it has already been at least partly priced in by financial markets. But it could have disastrous implications for the ability and willingness of the …
19th December 2011
A closer look at the euro-zone policymakers’ new plan to “save the euro” has not altered our view that it will not bring the debt crisis to an end, especially since several key components of the deal already appear to be unravelling. Admittedly, this …
December’s rise in the euro-zone composite PMI did nothing to alter our view that the region is heading into a fairly deep recession, regardless of how the debt crisis develops. … Euro-zone Flash PMIs (Dec.), Emp. (Q3) & HICP Inflation …
15th December 2011
October’s euro-zone industrial production data add to evidence that the wider economy may have contracted pretty sharply in Q4. … Euro-zone Industrial Production …
14th December 2011
Recent changes to the ECB’s bank lending operations and the news that national central banks may lend to the IMF have raised hopes that support for the region’s most troubled economies is being increased via the back door. But even if this is so, we doubt …
13th December 2011
Despite rising slightly in December, the German ZEW index points to a risk of recession in the coming months. … German ZEW Survey …
At their summit last week, euro-zone leaders agreed on the basics of a new “fiscal compact” which should help to reduce the risks that another debt crisis such as that seen over the last two years is ever allowed to develop. What the summit did not …
12th December 2011
While the ECB met expectations of a further cut in interest rates and greater support for banks today, it shattered hopes that it is about to fire a silver bullet into the heart of the debt crisis. … ECB shatters hopes of a "silver …
8th December 2011
Hopes that euro-zone policymakers will hatch a new “grand plan” to save the euro-zone may have grown, but evidence is mounting that the region is on the cusp of another deep recession. In November, the euro-zone composite PMI remained well below the …
It is not hard to see why the financial markets have responded positively to the latest proposals to save the euro: they seem to open the door to immediate financial help from the ECB and provide a long-term plan to prevent future crises. But we suspect …
7th December 2011
Recent euro-zone developments may have brought Italy back from the brink again. But Italy will still need years of financial assistance from the rest of the region and to go through years of severe pain if it is to reduce its public debt to a sustainable …
October’s German and Italian industrial production data do little to alter the likelihood that the euro-zone has fallen back into recession in the fourth quarter. … German & Italian Industrial Production …
The breakdown of euro-zone Q3 GDP does nothing to alter our view that the region is on the brink of another deep recession. … Euro-zone GDP Breakdown …
6th December 2011
The financial markets seem to be gambling that the European Central Bank and Germany are bluffing when they say they are not about to come to the euro’s rescue. But given the obstacles still in the way of a decisive solution to the crisis, it is a big …
5th December 2011
We expect a limited form of euro-zone break-up in the next two years to cause widespread economic disruption across the region. And with recent indicators already pointing to recession in a number of countries, no corner of the euro-zone is likely to …
1st December 2011
The European Central Bank will respond to the growing evidence that the euro-zone economy is heading back into recession by cutting interest rates to 1% at its December 8th meeting. What’s more, President Draghi is likely to announce the provision of …
Q3’s Swiss GDP figures confirmed that the economy is finally beginning to suffer from the franc’s strength. With the currency remaining strong and demand from the eurozone set to slump, the economy will struggle to expand at all next year. … Swiss GDP …
Q3’s Swiss GDP figures confirmed that the economy is finally beginning to suffer from the franc’s strength. With the currency remaining strong and demand from the eurozone set to slump, the economy will struggle to expand at all next year. … Swiss GDP (Q3 …
The latest fiscal data suggest that Ireland remains on track to meet its budget deficit target for this year. But the near-term outlook for the public finances in Southern Europe is more downbeat. … Euro-zone Fiscal Monitor …
30th November 2011
The latest euro-zone data revealed a nasty combination of high inflation and rising unemployment to add to the region’s troubles. … Euro-zone Flash CPI & Unemployment …
November’s EC business and consumer surveys support the message from other timely indicators that the euro-zone is entering a deep recession. … Euro-zone EC Survey …
29th November 2011
Q3’s GDP figures revealed that, for now at least, the Swedish economy continues to expand rapidly. Nonetheless, we expect the deepening euro-zone debt crisis to hit Sweden before too long, prompting growth to slow sharply next year. … Swedish GDP …
Q3’s GDP figures revealed that, for now at least, the Swedish economy continues to expand rapidly. Nonetheless, we expect the deepening euro-zone debt crisis to hit Sweden before too long, prompting growth to slow sharply next year. … Swedish GDP (Q3 …
The continued escalation of the euro-zone debt crisis suggests that some form of break-up of the currency union is now likely to come sooner rather than later. We expect Greece to leave the euro in 2012, with at least one further departure in 2013. And …
28th November 2011
The latest monetary data have revealed rising strains in the banking sector as the euro-zone’s debt crisis has deepened. While the ECB has continued to provide banks with liquidity, it has stopped short of buying enough government bonds to tackle the root …
