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Although progress is still slow, the latest euro-zone fiscal data provided more evidence that peripheral governments are gradually strengthening their fiscal positions. … Euro-zone Fiscal Monitor …
2nd June 2014
While the ECB looks certain to implement further policy action at this week’s Governing Council meeting – probably in the form of an interest rate cut and measures to stimulate bank lending – this seems unlikely to have much of a downward effect on the …
Q1’s small fall in Swedish GDP was little surprise after its sharp rise in Q4. But while the economy’s underlying growth is decent, the Riksbank might yet ease policy again in order to ward of deflationary pressures. … Swedish GDP …
30th May 2014
Q1’s small fall in Swedish GDP was little surprise after its sharp rise in Q4. But while the economy’s underlying growth is decent, the Riksbank might yet ease policy again in order to ward of deflationary pressures. … Swedish GDP (Q1 …
A small cut in the ECB’s main refinancing rate seems like a done deal this month and is likely to be accompanied by a reduction in the deposit rate to below zero. The Bank also seems set to offer more long-term loans to the banking sector on the condition …
29th May 2014
The renewed rise in the EC’s Economic Sentiment Indicator (ESI) suggests that the euro-zone recovery might gather a little pace in Q2. But growth will probably remain too weak to ward off deflationary pressures. … Euro-zone EC Survey …
28th May 2014
April’s euro-zone monetary data highlighted the fragile nature of the region’s banks and should spur the ECB to ease policy further at its meeting next week. … Euro-zone Monetary Indicators Monitor …
The Danish economy started 2014 strongly. But continued household deleveraging means that growth this year is likely to be more sluggish than the consensus expects. … Danish GDP …
Q1’s pick-up in Swiss GDP growth is a relief after a weak Q4 and suggests that the economy is still coping with the strong franc. But the threat of prolonged deflation will keep the central bank in strongly accommodative mode for a long time yet. … …
Q1’s pick-up in Swiss GDP growth is a relief after a weak Q4 and suggests that the economy is still coping with the strong franc. But the threat of prolonged deflation will keep the central bank in strongly accommodative mode for a long time yet. … Swiss …
The Danish economy started 2014 strongly. But continued household deleveraging means that growth this year is likely to be more sluggish than the consensus expects. … Danish GDP (Q1 …
Although populist parties will remain a minority at the European Parliament, the euro-zone’s weak recovery will sustain support for these parties, undermining national reform efforts across the region. … Weak euro-zone recovery will sustain populist …
27th May 2014
France’s economy hasn’t picked up much steam since it stagnated in Q1. Although the outlook for the second half of the year is a little brighter, the recovery will remain pretty weak. The resulting divergence with the German economy will complicate …
26th May 2014
The breakdown of German GDP for Q1 confirmed that the strong quarterly gain was partly down to temporary factors. And the renewed fall in the Ifo Business Climate Indicator in May suggested that the recovery may now be slowing. … German Ifo Survey (May) …
23rd May 2014
The ECB seems increasingly likely to unveil a new scheme to boost lending to the private sector, perhaps as soon as its June policy meeting. We would welcome such a scheme, but its effectiveness will be limited by how much risk the ECB is willing to take …
22nd May 2014
May’s PMIs suggested that the euro-zone recovery remains lacklustre and highlighted the continued divergence between France and Germany. … Euro-zone Flash PMIs (May …
Iceland’s central bank kept interest rates unchanged at 6% at its meeting today, despite raising its medium-term forecasts for GDP growth. We continue to think that the Sedlabanki will have to raise the policy rate later this year as the slack in the …
21st May 2014
Euro-sceptic parties are set to perform strongly at elections for the European Parliament. Although the result may have little impact on the institution itself, it risks undermining national governments’ ability to implement painful reforms, particularly …
Upcoming elections in Belgium are unlikely to deliver a decisive victory to any one party. With the main parties divided over fundamental economic and political reforms, we doubt that a new coalition would be able to agree on meaningful policies to …
20th May 2014
The unexpected drop in Italy’s GDP in Q1 underlines the fragility of the country’s recovery and further undermines attempts to bring down its crushing public debt load. … Fragile recovery hampering Italy's belt …
Norway’s mainland economy continued to hum along at a decent pace in Q1, but the underlying drivers of growth are weakening. … Norwegian GDP …
Norway’s mainland economy continued to hum along at a decent pace in Q1, but the underlying drivers of growth are weakening. … Norwegian GDP (Q1 …
Portugal’s clean exit from its bail-out at the weekend was soured by the news that the economy contracted in the first quarter. The GDP figures are not as worrying as they seem, but the Portuguese Government still faces a challenge to maintain markets’ …
19th May 2014
The 0.4% fall in Finland’s trend output indicator over Q1 is a clear indication that the country is struggling to exit recession. We expect the Finnish economy to stagnate this year, undermining government efforts to put public debt on a downward …
While the German economy expanded by an impressive 0.8% in Q1, this failed to spur growth elsewhere in the euro-zone and the region's GDP rose by just 0.2%. Possible explanations for this are the fact that Germany's expansion was partly down to temporary …
March’s euro-zone trade data confirm that the strong level of the euro continues to act as a significant headwind for euro-zone exporters. This will furnish the ECB with yet another reason to take bold policy action at its June meeting. … Euro-zone …
16th May 2014
The disappointingly modest rise in euro-zone GDP in Q1 will have done little to reduce the risk of deflation in the region and the stark divergence between the major economies only adds to policymakers’ problems. … Euro-zone GDP …
15th May 2014
March’s euro-zone industrial production figures confirmed that industry has made a weak start to 2014, underscoring the fragility of the recovery both in the sector and in the euro-zone economy as a whole. … Euro-zone Industrial Production …
14th May 2014
The fifth consecutive decline in ZEW investor sentiment in May suggests that the German economic recovery might not gain much pace from here. … German ZEW Survey (May …
13th May 2014
While President Draghi made clear last week that the ECB will loosen policy in June, he gave very few hints about just what action the Bank will take. Small cuts in the main refinancing and deposit rates seem like a done deal and they might be accompanied …
12th May 2014
The ECB signalled very strongly at today’s press conference that policy will be loosened next month. A small cut in the main refinancing rate seems like the least that the Bank could do and is unlikely to be particularly effective. Bolder policy action, …
8th May 2014
The Norges Bank left its monetary policy stance unchanged today and we continue to think that a slowdown in the economy will prevent the Bank hiking until 2016. … Growth slowdown to delay rate hikes in Norway until …
March’s industrial production data for key euro-zone countries suggested that the recovery in the sector failed to pick up any momentum and that even Germany experienced a modest slowdown. … German & Spanish Industrial Production …
The Riksbank’s report on household indebtedness underscores the magnitude of the problem and the need for it to be addressed. But we continue to think that the Bank will cut interest rates as deflationary fears prove to be more critical. … Deflation to …
7th May 2014
The latest economic data have left the ECB’s two “contingencies” for further policy action – a worsening of the medium-term inflation outlook and an unwarranted tightening of the money markets – either met or on the brink. While euro-zone CPI inflation …
March’s retail sales data suggested that the euro-zone economic recovery may finally be broadening out to include households, while the final PMIs for April pointed to a stronger pace of recovery at the start of Q2. … Euro-zone Retail Sales (Mar.) & …
6th May 2014
The euro-zone’s upcoming bank stress tests are likely to be more effective than the region’s earlier attempts. But the euro-zone financial system will heal only slowly, remaining a drag on the recovery for a while yet. Meanwhile, last week brought good …
5th May 2014
The improvement in investor sentiment towards the euro-zone has allowed even beleaguered Cyprus to tap the markets for funding. But the nation remains a long way from replicating Ireland’s ‘clean exit’ from its bail-out. Indeed, we think that Cyprus will …
2nd May 2014
March’s euro-zone unemployment figures maintained the picture of a gradual, but painfully slow, improvement in labour market conditions across the currency union. … Euro-zone Unemployment (Mar.) & Final Manu. PMI …
We doubt that recent events and data releases have been significant enough to ensure more policy action from the ECB at its May meeting. But developments in the inflation outlook and in money markets suggest that the Bank’s two “contingencies” for further …
1st May 2014
Although survey measures of short-term inflation expectations have fallen sharply, medium-term forecasts have so far remained well anchored. However, with deflationary pressures building, a de-anchoring of medium-term expectations is a clear danger in the …
Figures released today showed the Belgian recovery gaining a little momentum in the first quarter. But sharp falls in sentiment in March and April suggest that growth may yet slow later this year. … Belgian recovery likely to remain …
30th April 2014
The prospect of early elections in Slovenia is unlikely to spark significant market pressures. But it highlights how a dysfunctional political system is undermining the country’s economic reform efforts. … Slovenia’s political crisis shows flagging …
April’s inflation figures might have eased some of the immediate pressure on the European Central Bank (ECB) to provide more policy support, but they did not alter the big picture of growing deflation dangers in the currency union. … Euro-zone Flash CPI …
March’s euro-zone monetary data underlined the continued weakness of the region’s financial system and will help to maintain the pressure on the ECB to ease monetary policy further over the coming months. … Euro-zone Monetary Indicators Monitor …
29th April 2014
