Europe Economics Update ECB likely to end PEPP reinvestments early We suspect that before the end of the year, the ECB will announce that it will end PEPP reinvestments before the end of 2024. This would allow the ECB to shrink its balance sheet more quickly and... 2nd October 2023 · 3 mins read
Europe Economics Update Italy deficit projections: worry but don’t panic The Italian government’s decision to raise its deficit targets suggests it is trying to get away with as little fiscal tightening as possible. With EU fiscal rules set to come back into force next... 29th September 2023 · 3 mins read
Europe Economics Update Lending data point to recession The latest euro-zone money and credit data show that tighter ECB policy is continuing to weigh on households’ and firms’ borrowing, as well as influencing what they do with their savings. The weakness... 27th September 2023 · 2 mins read
FX Markets Update Taking stock of the European G10 currencies With most European G10 central banks now at, or very close to, the ends of their tightening cycles, this note examines where the European G10 currencies stand and how we see the outlook for the main... 22nd September 2023 · 5 mins read
Europe Economics Update SNB’s hold suggests rates have peaked The SNB’s decision to keep rates unchanged at 1.75% was a surprise. Although the Bank left the door open for further hikes, we think rates are now at their peak. And with inflation set to fall... 21st September 2023 · 4 mins read
Europe Economics Update Norges Bank and Riksbank nearly done Following today’s rate hikes, the Riksbank and Norges Bank are now at, or close to, the end of their tightening cycles. Both central banks’ new projections suggest that they are more likely than not... 21st September 2023 · 3 mins read
Europe Economics Update Norges Bank has one more hike to go We think Norges Bank will go through with its plan to raise its policy rate by 25bp next week, to 4.25%, and signal that its tightening cycle is over. It is then likely to will wait until around the... 15th September 2023 · 3 mins read
Europe Economics Update Riksbank to follow ECB lead next week The Riksbank looks all but certain to follow the ECB’s example and raise its key policy rate by 25bp next week, to 4.0%. However, while that could mark the end of its tightening cycle, on balance we... 14th September 2023 · 4 mins read
Europe Economics Update A coin toss decision for the SNB On balance, we think the SNB will look through the recent low inflation and hike rates by 25bp one last time to 2.00%, given policymakers’ previous hawkish commentary. But with the economy stagnating... 14th September 2023 · 5 mins read
Europe Economics Update End of ECB tightening cycle Today’s 25bp rate hike by the ECB probably brings its tightening cycle to an end. Given our view that underlying inflation will ease only gradually even though the euro-zone is heading for a recession... 14th September 2023 · 3 mins read
Europe Economics Update Falling inflation no guarantee of higher consumption We think that the positive impact of lower inflation on households’ real incomes in the coming quarters will be offset by weaker employment and nominal wage growth. As a result, we don’t think that... 7th September 2023 · 3 mins read
Europe Economics Update Spain and Italy hit harder by ECB rate hikes The higher share of floating rate mortgages in Italy and Spain means that household interest spending in both countries has risen much further than in Germany and France. Interest spending is also set... 6th September 2023 · 3 mins read
Europe Economics Update German fiscal policy to remain looser than pre-Covid The German government is unlikely to announce the kind of big stimulus package that some are calling for. However, fiscal policy will remain much more supportive than it was before the pandemic. 6th September 2023 · 4 mins read
Europe Economics Update Repayment of €2.2trn TLTROs to have little impact The repayment of ECB TLTROs by banks has gone smoothly so far and we expect the rest of the TLTROs to be repaid by the end of 2024 without significantly affecting financial conditions or interest... 31st August 2023 · 4 mins read
Europe Economics Update Money and credit data show effects of tighter policy The effects of tighter monetary policy are very clear in the latest money and credit data, reinforcing our view that the euro-zone economy will perform worse than most analysts expect in the coming... 29th August 2023 · 3 mins read
Europe Economics Update Denmark’s success complicates monetary policy Denmark’s economy has been among the fastest-growing since the pandemic and, although growth will slow in the coming months, we expect it to continue outperforming the euro-zone. Nonetheless, the DNB... 24th August 2023 · 4 mins read
