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A raft of data on the euro-zone consumer sector last week left the outlook still rather uncertain. The bad news was that unemployment rose further in December and wage growth looks set to drop. But the EC’s consumer confidence index points to a marked …
1st February 2010
January’s flash euro-zone consumer prices figures further highlighted the distinct lack of inflation pressure in the region and offered hope that euro-zone consumers will escape the squeeze on spending power facing their US and UK counterparts. … …
29th January 2010
December’s euro-zone money supply figures and January’s ECB Bank Lending Survey suggest that credit conditions in the region remain very tight, despite the ECB’s unlimited provision of liquidity to banks. … Euro-zone Monetary Indicators Monitor …
January’s improvement in the EC euro-zone consumer and business survey was somewhat reassuring after the weaker tone of some of the recent other surveys. But we will need to see a sharper rise in sentiment in the coming months to be convinced that the …
28th January 2010
The ECB meeting on February 4th is likely to be uneventful, with interest rates on hold and no significant change to existing plans to gradually phase out unconventional support for the banking sector. The Bank will return to a system of auctioning off …
The recent blow-out in Greek Government bond spreads seems to over-do the depth of its fiscal problems compared to those of other crisis economies like Ireland. But Greece has clearly lost the markets’ confidence and may now have to work much harder than …
January’s fall in German consumer price inflation confirmed that households’ real incomes are being squeezed by much less than those elsewhere by rising prices. And inflation looks set to remain very subdued for the foreseeable future. … German Consumer …
27th January 2010
The markets and credit rating agencies had been looking to yesterday’s budget for confirmation that the Portuguese Government is prepared to follow other fiscally strained euro-zone economies in introducing tough measures to improve its public finances. …
January’s sharper than expected increase in German Ifo business sentiment came as a relief after the deterioration in some other surveys lately. The rise in the composite Business Climate Index, from 94.7 to 95.8, left it at an 18-month high and in line …
26th January 2010
Hints from the German Government that promised income tax cuts could be put off until at least next year make a convincing consumer revival seem even less likely. But we still expect a relatively strong pick-up in exports to mean that Germany leads the …
25th January 2010
The recent sharp rise in CPI inflation in both the US and the UK has caused concern that interest rate hikes might not be far off. But euro-zone inflation has been far more subdued, challenging the conventional wisdom that prices in the region are …
Europe’s economies have continued to benefit from the improvement in the global environment, but there are still major uncertainties over the likely strength and sustainability of the upturn in the region. Domestic economic conditions have generally …
21st January 2010
January’s small fall in the euro-zone composite Purchasing Managers’ Index (PMI) supports the message from Tuesday’s ZEW survey that the recovery might be losing momentum. … Euro-zone Flash PMIs …
January’s fall in German ZEW investor sentiment confirmed that confidence in the recovery remains fragile. We still see the German economy expanding by a pretty healthy 2.0% this year, but the downside risks appear to be increasing. … German ZEW …
19th January 2010
Recent developments support our view that the euro will come under renewed downward pressure in the coming months. With concerns about Greece mounting, economic prospects deteriorating compared to the US and ECB interest rates set to remain on hold, we …
18th January 2010
The latest Spanish housing market data suggest that the residential property downturn continued to ease in the latter part of 2009. Nonetheless, we think that house prices still have much further to fall. This, coupled with high household indebtedness and …
15th January 2010
November’s fall in euro-zone exports could signal that the strong euro is beginning to take its toll on exporters. Nonetheless, in Q4 at least, the external sector is likely to have continued to support the wider economy. … Euro-zone Trade Bal. (Nov.) & …
There were no surprises from the ECB today as it waits to judge the impact of previously announced plans to phase out its emergency lending to banks. But the Bank’s cautious tone on the economic outlook supports our view that official interest rates will …
14th January 2010
November’s strong gain in euro-zone industrial production suggested that the sector is still coping fairly well with the euro’s strength. But industrial activity still looks unlikely to boost the economy as strongly in Q4 as it did in Q3. … Euro-zone …
December’s rise in euro-zone CPI inflation, from 0.5% to 0.9%, left it at a ten-month high. But the increase was due to a further rise in energy inflation, which should soon begin to moderate. Meanwhile, the pressure on underlying or core inflation …
12th January 2010
Recent suggestions that Portugal may be “the next Greece” overlook the fact that Portugal’s economic and fiscal position is fundamentally healthier. Still, this month’s budget may need to reveal decisive deficit-reducing measures to appease the markets …
The Swiss National Bank’s assurance that it will intervene to prevent the franc from appreciating too much further is encouraging. But intervention now might not be as successful as in the recent past and a further appreciation of the franc remains a key …
11th January 2010
For some time, we have been fairly optimistic about the prospects for the euro-zone in 2010. Nonetheless, the outlook remains highly uncertain and there are several risks which could derail the recovery were they to materialise. … New Year challenges for …
November’s renewed increase in German industrial production is a welcome sign that the recovery there is back on track. But with unemployment still rising in the euro-zone as a whole, it could be some time before consumers join in. … German Industrial …
8th January 2010
After outlining the start of its exit strategy last month, we doubt that the ECB will announce any further changes at the forthcoming meeting. The Bank might increase the interest rate on its threemonth loans in the not too distant future or return to …
7th January 2010
December’s rise in the EC measure of euro-zone economic sentiment was fairly encouraging. Unfortunately, though, November’s fall in retail sales confirmed that the recovery has yet to reach the household sector. … Euro-zone EC Survey (Dec.) & Retail Sales …
Greeces troubles have highlighted the need for decisive fiscal consolidation in at least parts of the euro-zone. This need not be as aggressive as in the UK or US, but could still knock over 0.5% off annual euro-zone GDP growth from 2011. And with …
The Greek Government’s pledge to reduce the budget deficit to 3% of GDP by 2012 appears to be encouraging news for markets. But the scale of the adjustment required suggests that the Government will struggle to meet its targets without prompting a huge …
6th January 2010
Euro-zone producer price inflation continued to inch up in November. But it remains deep in negative territory, suggesting that pipeline inflationary pressures remain very weak and that core CPI inflation will continue to slow this year. … Euro-zone …
December’s rise in euro-zone inflation reflects temporary energy effects. With economic activity still at very low levels, deflation remains a bigger risk for the region than high inflation in the medium term. … Euro-zone Flash CPI & German Unemployment …
5th January 2010
This report is only available as a PDF. Click to download. … French Consumer Spending (Nov) & Italian Retail Sales (Oct.) …
23rd December 2009
This report is only available as a PDF. Click to download. … When will the labour market start to recover? …
21st December 2009
This report is only available as a PDF. Click to download. … German Ifo Survey (Dec.) & Euro-zone Trade (Oct.) …
18th December 2009
With the Irish economy expanding again and the Government apparently willing to take the tough actions required to get the public finances on an even keel, Ireland looks set to avoid coming under the same kind of market pressures as those recently endured …
17th December 2009
This report is only available as a PDF. Click to download. … Euro-zone Flash PMIs (Dec.) …
16th December 2009
Recent developments in Austria underline how the worst has not yet passed for some of Europe’s banks. While the larger euro-zone countries are less vulnerable, we expect lending to fall in some of the region’s smaller countries and most of Emerging Europe …
This report is only available as a PDF. Click to download. … German ZEW (Dec.) & Euro-zone Labour Costs (Q3) …
15th December 2009
While the euro-zone is benefiting from the improvement in global trade conditions, the big issue is whether this will translate into any lasting pick-up in the domestic economy. There are reasons for hope, but the strong euro and premature withdrawal of …
14th December 2009
This report is only available as a PDF. Click to download. … Euro-zone Industrial Production (Oct.) & Employment (Q3) …
This report is only available as a PDF. Click to download. … Will the troubles in Greece spread? …
By announcing an end to its corporate bond purchases, the Swiss National Bank has become the latest to start phasing out its unconventional policy support. But its downbeat forecasts for economic activity suggest that it will not raise official interest …
10th December 2009
This report is only available as a PDF. Click to download. … Italian GDP (Q3), Italian & French Industrial Prod’n (Oct.) …
This report is only available as a PDF. Click to download. … German & French Trade (Oct.) …
9th December 2009
Finland has been hit particularly hard by the global economic downturn, faring almost as badly as Ireland. Nonetheless, the foundations are in place for a reasonably strong recovery, suggesting that Finland could be one of the euro-zone’s strongest …
8th December 2009
The dramatic market reaction to the downgrade of Greece’s credit rating from A- to BBB+ by Fitch today partly reflected concerns that Greek banks may in the future be unable to use Government bonds as collateral to obtain funds from the ECB. Whether or …
This report is only available as a PDF. Click to download. … German Industrial Production (Oct.) …
This report is only available as a PDF. Click to download. … Low inflation to keep ECB rates on hold …
7th December 2009
