ECB Watch Hesitant ECB will probably step up bond purchases At next Thursday’s monetary policy meeting we expect the ECB to nudge up its forecast for inflation in 2021 and nudge down its forecast for GDP growth, but stress that inflation is still likely to... 4th March 2021 · 7 mins read
Europe Data Response Euro-zone Retail Sales (Jan.) & Unemp. Rate (Jan.) January’s data show that euro-zone retail sales fell very sharply at the start of this year, despite the strength of online sales. As lockdowns have been extended in many economies and daily virus... 4th March 2021 · 2 mins read
Europe Data Response Euro-zone Final PMIs (Feb.) The small upward revision to the euro-zone’s Composite PMI for February still leaves it consistent with another contraction in GDP in Q1. And while Italy’s PMI rose above the 50-mark, that is unlikely... 3rd March 2021 · 2 mins read
Europe Data Response Euro-zone HICP Inflation (Feb. 2021) After euro-zone inflation held steady in February, it looks set to rise over the rest of the year, taking it above the near-2% target. But this will be driven largely by temporary forces so we think... 2nd March 2021 · 2 mins read
Europe Economics Weekly Rising yields put pressure on ECB The surge in euro-zone government bond yields this week has ruffled the feathers of the doves at the ECB, who are keen to look through short-term upward forces on inflation. The still-high number of... 26th February 2021 · 8 mins read
Europe Economics Update How will the ECB respond to the rise in bond yields? The recent increases in real bond yields leave them still at low levels, but ECB policymakers nonetheless seem uncomfortable. Their verbal interventions have had little impact so far, so we think that... 26th February 2021 · 2 mins read
Europe Data Response EC Survey (Feb.) February’s renewed rise in the EC’s Economic Sentiment Indicator (ESI) for the euro-zone still left it at a depressed level by pre-pandemic standards and supports our view that activity will remain... 25th February 2021 · 2 mins read
Europe Data Response Euro-zone Final HICP (Jan.) January’s jump in inflation is likely to be followed by further increases to over 2% later this year. But we think that much of this is temporary and expect it to fall back sharply in 2022. The upshot... 23rd February 2021 · 3 mins read
Europe Economics Weekly Rising bond yields, resilient manufacturing We doubt that the increase in sovereign bond yields this week is the beginning of sustained rise in borrowing costs, even if the headline inflation rate rises further. Meanwhile, we are looking... 19th February 2021 · 6 mins read
Europe Data Response Euro-zone Flash PMIs (February) February’s small increase in the Composite PMI left it still below 50 and consistent with our view that euro-zone GDP will probably edge down again in Q1. The survey also suggested that price... 19th February 2021 · 3 mins read
Europe Data Response EC Consumer Confidence (Feb.) Euro-zone consumer confidence rose in February but it remained very low. Unless vaccine programmes accelerate to allow restrictions to be lifted soon, a sustained pick up in confidence remains months... 18th February 2021 · 2 mins read
Europe Economics Update Governments likely to avoid a labour market cliff edge We think the risk of surge in unemployment and slump in household incomes later this year is quite low. Euro-zone governments are choosing to extend their job support schemes and will probably scale... 17th February 2021 · 3 mins read
Europe Commercial Property Chart Pack Pandemic widens sectoral divergences Despite the sharp hit to economic activity, euro-zone prime commercial property values were comparatively unscathed last year, falling by just 2%. However, this hides large differences in performance... 16th February 2021 · 10 mins read
Europe Economics Update Portugal’s recovery shifting into reverse After a relatively mild first wave of coronavirus, Portugal is now contending with the worst second wave in Europe. Another economic contraction in Q1 is all but certain and more delays to the vaccine... 16th February 2021 · 7 mins read
Europe Data Response Euro-zone GDP & Employment (Q4) The preliminary estimate of euro-zone Q4 GDP was revised up slightly in today’s release, and confirmed that the hit to the economy from the autumn lockdowns was much smaller than in Q2 last year... 16th February 2021 · 2 mins read
