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The recent decline in the spread between German and other euro-zone government bond yields is an encouraging sign that rising fiscal deficits in the region are unlikely to lead peripheral governments’ interest rates to spiral higher. But we suspect that …
28th July 2009
The latest euro-zone money figures revealed that lending growth continues to slow. Of course, other things, equal, the ECB’s recent 12-month liquidity injection should help to boost bank lending in the months ahead. But on balance, we still expect lending …
27th July 2009
This report is only available as a PDF. Click to download. … How severe is the German credit crunch? …
This report is only available as a PDF. Click to download. … Euro-zone Flash PMIs & German Ifo Survey (Jul.) …
24th July 2009
This report is only available as a PDF. Click to download. … French Consumer Spending (Jun.) & EZ Industrial Orders (May) …
22nd July 2009
The recent appreciation of the euro is yet to have had an impact on euro-zone import prices, due to the normal lags between these two variables. But it soon will. What’s more, with spare capacity mounting at home and abroad, the future depreciation of the …
21st July 2009
In its blueprint for the budget law (DPEF in Italian) – the Italian Government reiterated its commitment to fiscal consolidation. Because of Italy’s huge public debt, this is a formidable challenge, especially given the current economic situation. With …
20th July 2009
This report is only available as a PDF. Click to download. … ECB still resisting QE …
This report is only available as a PDF. Click to download. … Euro-zone Trade Balance (May) …
17th July 2009
The latest housing market data show that the residential property market downturn is continuing to gather pace. With most valuation measures still suggesting that house prices remain well above their sustainable level, further sharp falls are inevitable. …
15th July 2009
This report is only available as a PDF. Click to download. … Euro-zone CPI (Jun. Final) …
On the whole, signs of recovery have been less convincing in Europe than elsewhere. A relatively cautious policy stance and the delayed effects of the credit crunch suggest that the euro-zone, in particular, will be the last of the major economies to …
14th July 2009
This report is only available as a PDF. Click to download. … German ZEW (Jul.) & Euro-zone Industrial Production (May) …
This report is only available as a PDF. Click to download. … Industrial recovery still a little way off …
13th July 2009
This report is only available as a PDF. Click to download. … France & Italy Industrial Production (May) …
10th July 2009
This report is only available as a PDF. Click to download. … German Industrial Production (May) …
8th July 2009
Like some other deficit economies, Spain has so far weathered the global economic slump surprisingly well. But this is unlikely to last. We still expect Spains considerable economic imbalances to lead to a deeper and longer downturn than those of most its …
6th July 2009
This report is only available as a PDF. Click to download. … ECB’s ‘wait and see’ stance may not last for too long …
This report is only available as a PDF. Click to download. … Euro-zone Retail Sales (May) & Final PMI (Jun.) …
3rd July 2009
Italian banks have so far coped with the financial crisis better than most of their European peers. While this has not prevented a slowdown in lending, the problems in the supply of credit seem manageable. Once demand picks up, the credit channel will be …
2nd July 2009
Despite weaker signs of recovery in the euro-zone than elsewhere, the ECB’s policy support remains considerably narrower than other central banks’. President Trichet suggested today that the Bank is unlikely to adopt a policy of quantitative easing in the …
This report is only available as a PDF. Click to download. … Euro-zone Unemployment & Producer Prices (May) …
Despite tentative signs of green shoots appearing, the Swedish Riksbank reduced interest rates to 0.25% and remains committed to keeping them at this rate for a prolonged period. But for now at least, the Bank appears reluctant to follow the Fed and Bank …
Inflation fell below zero for the first time in the post-EMU period in June, probably courtesy of energy related base effects. We expect the inflation rate to remain negative for the next six months or so. But the risk is that the region might enter a …
1st July 2009
The latest euro-zone money and credit figures revealed that, after having flattened off for some time, the monetary base increased again. The hope is that banks will feel encouraged to lend. But there is no guarantee that this will happen. … Euro-zone …
30th June 2009
Since the onset of the downturn, the Irish economy has contracted significantly more sharply than other deficit economies such as the US and UK. Unfortunately, Ireland’s troubles appear far from over and it should be one of the last euro-zone economies to …
This report is only available as a PDF. Click to download. … Euro-zone Flash CPI & German Unemployment (Jun.) …
The German labour market held up relatively well at the start of the economic downturn, at least partly reflecting Government incentives for firms to retain workers for shorter hours. But the severity of the recession is now causing firms to resort to …
29th June 2009
This report is only available as a PDF. Click to download. … Rising sentiment points to smaller euro-zone GDP drop in Q2 …
This report is only available as a PDF. Click to download. … Fiscal policy to remain supportive, for now …
26th June 2009
This report is only available as a PDF. Click to download. … German CPI (1st Est. Jun.) …
The ECB looks almost certain to leave interest rates on hold at 1.0% this month, where we expect them to remain until at least the end of 2010. There is little hope that any new unconventional policy support will be announced. The Bank’s attention is …
25th June 2009
The German Government’s recent introduction of a law requiring a balanced budget from 2016 has prompted much debate over just how harmful it might be. Our view is that, while the law might place undesirable limits on fiscal policy in the future, it does …
24th June 2009
This report is only available as a PDF. Click to download. … Euro-zone Flash PMIs (Jun.) …
23rd June 2009
This report is only available as a PDF. Click to download. … German Ifo Survey (Jun.) …
22nd June 2009
This report is only available as a PDF. Click to download. … Consumers hit by weakening labour market …
The SNB’s pledge to go on purchasing large quantities of corporate bonds while providing generous liquidity to the banking sector and intervening ‘decisively’ in currency markets has left it among the central banks acting most aggressively to support the …
18th June 2009
Norway’s relatively mild downturn should ensure that the latest 25bp interest rate reduction by the Norges Bank is probably the last in the current cycle. But we still think that the Bank will not tighten monetary policy as quickly as its own interest …
17th June 2009
This report is only available as a PDF. Click to download. … Euro-zone Trade Balance (Apr.) …
The announcement by the Spanish Government that it plans to set up a fund to provide capital to the ailing banking sector is certainly good news. But on its own, it will not be enough to prevent the Spanish economy from lagging behind the rest of the …
16th June 2009
In its latest Financial Stability Review, published yesterday afternoon, the ECB has taken a less gloomy view on the potential losses that euro-zone banks still have to face relative to a previous IMF estimate published in April. Still, even under this …
This report is only available as a PDF. Click to download. … German ZEW Survey (Jun.) & EZ Final CPI (May) …
This report is only available as a PDF. Click to download. … Euro-zone Employment (Q1) …
15th June 2009
This report is only available as a PDF. Click to download. … Euro-zone to emerge last from recession …
This report is only available as a PDF. Click to download. … Euro-zone Industrial Production (Apr.) …
12th June 2009
Today’s announcement that the Swedish Riksbank is to borrow €3bn from the ECB confirms that, while the green shoots of recovery may be starting to emerge in parts of the global economy, the Baltic crisis remains a major weight on the Swedish economy’s …
10th June 2009
This report is only available as a PDF. Click to download. … Italian GDP (Q1), French & Italian Industrial Production (Apr.) …
