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Q2’s GDP release revealed that Switzerland has so far avoided a recession despite the strength of the franc. But it seems very unlikely that positive contributions from nettrade can be sustained and we see activity contracting again before long. … Swiss …
28th August 2015
Q2’s GDP release revealed that Switzerland has so far avoided a recession despite the strength of the franc. But it seems very unlikely that positive contributions from net trade can be sustained and we see activity contracting again before long. … Swiss …
The rise in the euro exchange rate has put the onus on the ECB to maintain and perhaps increase monetary policy support. We doubt that the Bank will announce any policy changes following its meeting on 3rd September as it downplays risks surrounding …
27th August 2015
Although Denmark’s central bank has started to unwind some of the special measures that it introduced earlier this year to cap upward pressure on the currency, we still think that the deposit rate is likely to remain at record lows until at least mid-2016 …
July’s euro-zone monetary data suggest that Q2’s slowdown in GDP growth is not the beginning of a more substantial downturn. Nevertheless, growth is likely to remain sluggish. And the problems in Greece’s banking sector are far from over. … Euro-zone …
The strong expansion in Spain’s economy in Q2 was powered by domestic demand. But this partly reflected the effects of lower oil prices and looser fiscal policy ahead of the general election. As these boosts fade, GDP growth is likely to slow. … Spanish …
France’s Government has finally started to tackle the country’s weak labour market. But we are sceptical that the reforms so far will be sufficient and think that more ambitious measures will be needed to address its structural deficiencies and get France …
26th August 2015
Agriculture accounts for 2% of GDP while the livestock sector is probably 1% or less. Accordingly, a 10% reduction in livestock output would reduce GDP by 0.1% for as long as it lasts. This accords with estimates from the National Farmers Union, which put …
25th August 2015
August’s German Ifo survey suggested that GDP growth had continued to accelerate in Q3. But expectations for the future were weakening even before the latest rise in the euro, suggesting that growth may be nearing a peak. … German Ifo Survey (Aug) & GDP …
Finland’s unemployment rate has been on the rise for the best part of three years. While we do not think that it will climb much further, we do not expect it to fall much over the next few years either. This will prevent Finland from contributing to the …
24th August 2015
Today’s rate cut by the Sedlabanki is likely to be a one-off. Indeed, the recent acceleration of economic growth suggests that the risks to the Bank’s new inflation forecasts are tilted to the upside. … Rate cut in Iceland set to be a …
Prime Minister Tsipras’ decision to call an election threw the Greek situation back into disarray only hours after he secured Greece’s first bailout payment last week. Tsipras should win, perhaps with a stronger mandate to pass reforms. But as no major …
21st August 2015
August’s rise in the euro-zone composite PMI came as a relief after last month’s fall and signs of a slowdown in other indicators. But it still points to modest growth that will do little to erode the spare capacity in the economy. … Euro-zone Flash PMIs …
Inflation dynamics continue to hamper Portugal’s attempts to deal with its huge debt problems. The country may need to implement more fiscal austerity as it struggles to pay down its debt. … Portugal’s fiscal consolidation hampered by low …
20th August 2015
Norway’s Q2 GDP data showed that lower energy prices continued to weigh on the oil and gas sector. But the mainland economy also slowed. We suspect that this will prompt the Norges Bank to loosen monetary policy next month. … Norwegian GDP …
Norway’s Q2 GDP data showed that lower energy prices continued to weigh on the oil and gas sector. But the mainland economy also slowed. We suspect that this will prompt the Norges Bank to loosen monetary policy next month. … Norwegian GDP (Q2 …
The German Parliament’s approval of the third Greek bailout should prompt payments allowing Greece to narrowly avoid default yet again. But Grexit risks have not disappeared and are likely to flare up in the autumn when Greece fails to pass its first …
19th August 2015
Today’s rate hike by Iceland’s central bank is likely to be part of a sustained tightening cycle to counter strong domestic demand growth and inflationary pressures. And we think further rate increases will be needed in the coming months, as the …
The relief rally in Chinese equities prompted by additional policy stimulus has turned global sentiment around, but a sustained recovery in commodity prices will probably require hard evidence that the Chinese economy is picking up again. Fortunately, …
18th August 2015
June’s euro-zone goods trade data suggested that net trade boosted GDP growth in Q2. But as the effects of the weaker euro fade, export growth might soon slow again. … Euro-zone Trade …
17th August 2015
The remaining hurdles to the implementation of the third Greek bailout look likely to be cleared in the next few days. But the deal could unravel quite quickly if Greece fails to meet the extremely demanding economic and fiscal conditions upon which it …
14th August 2015
Euro-zone GDP growth lost some pace in the second quarter, with a renewed divergence between healthy growth in Germany and stagnation in France. … Euro-zone GDP (Q2 …
Q2’s Greek GDP figures brought some rare good news. But they relate to an entirely different economy than the one currently being strangled by capital controls. … Greek GDP (Q2, …
13th August 2015
The rebound in Sweden’s headline inflation rate in July might suggest that the Riksbank won’t loosen monetary policy further at its next meeting. But the bigger picture is that inflation is still extremely weak, indicating that more action is needed. … …
Although the renewed fall in French inflation in July largely reflected the decline inthe price of oil, the data nonetheless confirmed that price pressures remain very subdued in the euro-zone’s second-largest economy. … French CPI …
June’s fall in industrial production rounded off a very weak quarter for the sector and strongly suggested that industry will have contributed to a slowdown in quarterly GDP growth in Q2. … Euro-zone Industrial Production …
12th August 2015
While Greece appears finally to be on the verge of receiving a third bailout, the extremely optimisticeconomic & fiscal projections underlying the plan suggest that it might not last for very long. … Greek bailout built on fantasy …
11th August 2015
August’s fall in ZEW investor sentiment suggests that, despite Greece moving closer to a deal with its creditors, investors are increasingly worried about Germany’s recovery. … German ZEW …
Spain is set to remain the fastest growing of the major euro-zone economies for the next few quarters. But while the economy’s fundamentals have improved, the recent impressive growth rates also rest on factors that may soon start to fade. Given that the …
7th August 2015
June’s industrial production from the euro-zone’s major economies suggested that next week’s figures on GDP growth in the currency union will reveal a slowdown from the already modest growth rates seen in Q1 and Q4 last year. … German, French & Spanish …
Hopes that Germany would drive a strong euro-zone recovery have faded as subdued demand for its exports has offset the boost from a weaker euro. This trend is set to continue. And as the consumer recovery is unlikely to gain pace, Germany cannot be relied …
6th August 2015
While the euro-zone economy has continued to weather the ongoing Greek crisis reasonably well, one potentially worrying recent development is the apparent slowdown in the labour market recovery. Not only did unemployment rise for the first time in nine …
5th August 2015
The sharp drop in euro-zone retail sales in June suggests that consumer spending growth slowed in Q2. But July’s final Composite PMI implies that the wider economy maintained a steady pace of expansion at the beginning of Q3. … Euro-zone Retail Sales …
The Italian economy’s tentative return to growth and recent structural reforms are unlikely to feed into a meaningful labour market recovery for some time yet. So frustrations with Mr Renzi’s reformist Government may build further. … Italy’s recovery and …
4th August 2015
The scale of the damage done to the Greek economy by the country’s renewed crisis and imposition of capital controls looks set to be far worse than the provisional plans for a third bailout envisaged and suggests that Greece is still likely to leave the …
3rd August 2015
The peripheral economies continued to make fiscal progress in June. But halfway through the year, most have much more work to do if they are to meet their 2015 budget targets. The economic deterioration in Greece suggests that it is highly unlikely to …
Belgium has started to reform its labour market and improve its competitiveness. But this will take time to bear fruit, and further work will be needed. Accordingly, over the next few years we expect GDP growth to remain sluggish and debt to stay high. … …
31st July 2015
Looking ahead to this week, we think that euro-zone retail sales data for June will reveal a slight slowdown in annual sales growth. On a country level, indicative of their wider economic performances, we suspect that industrial production growth in June …
Euro-zone inflation was well below target in July and renewed rises in unemployment suggest that disinflationary forces remain strong. … Euro-zone Flash CPI (Jul.) & Unemployment …
July’s inflation data confirmed that price pressures in Germany are very subdued, underlining the need for continued and perhaps increased ECB policy support. … German Flash CPI …
30th July 2015
Ireland's economy went like the clappers in Q1, setting the country up for another year as the euro-zone's fastest-growing economy. … Ireland GDP …
The European Commission’s monthly Business and Consumer Survey for July provided some reassurance that the euro-zone economic recovery has retained some momentum in the third quarter. But growth remains generally sluggish and the case for further policy …
The provisional estimate of Swedish Q2 GDP revealed that the economic recovery regained some momentum after the disappointing start to the year. But we doubt that it will prevent the Riksbank from cutting the policy rate further below zero. … Swedish GDP …
While Spain’s economic recovery gathered more pace in the second quarter, the large amount of spare capacity is still sustaining deflationary pressures in the economy. … Spanish GDP (Q2 est.) & HICP …
Euro-zone current account imbalances have narrowed since the financial crisis, and there are good reasons to think that they will not return to pre-crisis levels for some time. But policymakers’ response to remaining imbalances will continue to impart a …
29th July 2015
