Euro-zone economy still growing despite Iran war

Euro-zone GDP (excluding Ireland) rose by 0.3% in Q1 and the latest official activity data point to a similar performance in Q2. Meanwhile, suggestions that European policymakers should engineer a major depreciation of the euro against the renminbi are unlikely to go anywhere. Next week, the ECB looks set to leave interest rates unchanged, and while most forecasters expect it to hike in September, we think its next move is more likely to be a cut in 2027.