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The ECB’s timidity and strong domestic demand has allowed Sweden’s Riksbank to leave monetary policy unchanged today. But with headline inflation in Sweden still close to zero and policy likely to be loosened further in the euro-zone, the Riksbank will be …
15th December 2015
October’s rise in euro-zone industrial production provides an early indication that the sector will have had a solid Q4, adding to evidence that the region’s recovery may have regained some pace at the end of 2015. … Euro-zone Industrial Production …
14th December 2015
Contrary to hopes that a weaker euro and accommodative monetary policy would be particularly beneficial to Germany’s supposedly super-competitive export sector, the latest data have brought signs that growth may have passed its peak. Both exports and …
11th December 2015
Ireland’s impressive recovery continued in Q3. And with the conditions in place for continued rapid growth, it is set to remain the euro-zone’s fastest-growing economy. … Ireland GDP …
10th December 2015
November’s consumer prices data showed a continued divergence between the subdued rates of inflation in Sweden and Denmark and stronger price pressures in Norway, reflecting the recent depreciation of its currency. … Swedish, Danish & Norwegian Consumer …
The renewed fall in France’s headline inflation rate in November highlights the absence of price pressures in the region’s second-largest economy. The weakness of the economy, underscored by the details of October’s industrial production data, suggests …
With the ECB’s cautious action last week reducing upward pressure on the franc against the euro, the Swiss National Bank (SNB) was able to leave policy on hold as expected today. But we still think that the ECB will expand its QE programme next year and …
The recent further fall in oil prices and imminent commencement of monetary tightening in the US are unlikely to compensate for the ECB’s disappointingly timid action at last week’s policy meeting. … Will the Fed & oil prices bail out the …
9th December 2015
Today’s decision by Iceland’s central bank to keep its key interest rates unchanged was merely a reflection of the improvement in the short-term inflation outlook and a tighter policy stance will still be required next year. … Iceland holds rates but more …
The euro-zone has proved relatively resilient in the face of global headwinds, but the region still has to contend with significant domestic problems. And with fiscal policy unlikely to provide a big boost to growth, the onus will remain firmly on the ECB …
8th December 2015
The second estimate of euro-zone GDP in Q3 revealed that the slowdown in growth was driven by weaker net exports. As the boost to consumer spending growth from lower oil prices fades, we think that GDP growth will slow further next year. … Euro-zone GDP …
The solid growth in Iceland’s GDP in Q3 confirmed that the economy is performing strongly and has put the 2008 collapse of the banking sector behind it. With domestic demand very healthy, the central bank is unlikely to be deterred from hiking rates. … …
The unprecedented success of France’s far-right Front National (FN) in Sunday’s regional elections is a symbolic victory for the party’s protectionist and anti-immigration policies. While the initial economic and policy effects are likely to be limited, …
7th December 2015
October’s unexpectedly-small rise in German industrial production was another signthat GDP growth in the euro-zone’s largest economy has passed its peak. … German & Spanish Industrial Production …
The ECB’s failure to live up to its own hype at December’s Governing Council meeting looks likely to have at least some negative consequences, both on the economic outlook via the market response and on its own ability to influence markets verbally in the …
4th December 2015
The European Central Bank’s failure to meet the expectations for further policy loosening fuelled by its own dovish signals has dented both its reputation for communication and, more importantly, the outlook for the euro-zone economy. … ECB fails to live …
3rd December 2015
October’s euro-zone retail sales data suggest that the consumer recovery might be losing some steam. But the final PMIs for November suggest that the overall economic recovery might actually have gained a little pace. … Euro-zone Retail Sales (Oct.) & …
After the further slowdown in euro-zone GDP growth in the third quarter, more timely survey indicators such as the composite PMI have offered tentative evidence of a renewed acceleration in Q4. Nonetheless, growth prospects remain sluggish at best, while …
2nd December 2015
An expansion of the QE programme tomorrow would probably require some changes to ECB rules. But we do not think that this will be enough to deter the Bank from implementing more stimulus. … Current QE rules won’t stop the …
November’s weaker-than-expected euro-zone consumer prices figures gave a final green light for the ECB to announce much-needed additional monetary policy stimulus at tomorrow’s Governing Council meeting. … Euro-zone Flash CPI …
The latest fiscal data provided further evidence that the peripheral countries are improving their budgetary positions. But with some of these countries planning to loosen the fiscal reins next year, there is a clear risk of slippage and a further rise in …
1st December 2015
October’s euro-zone unemployment data confirmed that the region’s steady labour market recovery has continued. But the bigger picture is that unemployment remains too high to boost wage growth and inflation. … Euro-zone Unemployment (Oct.) & Final Mfg PMI …
The Swiss GDP release revealed that growth stalled in Q3 and November’s manufacturing PMI points to worse to come. This raises the likelihood that the Swiss National Bank (SNB) will increase its policy support in the coming months. … Swiss GDP …
The Swiss GDP release revealed that growth stalled in Q3 and November’s manufacturing PMI points to worse to come. This raises the likelihood that the Swiss National Bank (SNB) will increase its policy support in the coming months. … Swiss GDP (Q3 …
November’s small rise in German HICP inflation appears to have reflected energy effects. With the core rate still very subdued, there is nothing here to put the ECB off increasing its policy support this week and perhaps beyond. … German Flash CPI …
30th November 2015
Sweden’s economy posted yet another decent expansion in Q3, which was encouragingly broad-based. But Danish GDP contracted due to weak net exports, suggesting that the euro-zone’s summer slowdown may have taken its toll. … Swedish & Danish GDP …
This report is only available as a PDF. Click to download. … Swedish & Danish GDP (Q3 15) …
Euro-zone activity surveys for November, released last week, suggest that the economic recovery regained some pace in Q4. But the rates of growth that they imply would still only reduce the spare capacity in the economy slowly. As a result, the outlook …
27th November 2015
November’s EC consumer and business survey supported the message from other survey indicators released earlier this week that after Q3’s slowdown the eurozone’s economic recovery may have regained some pace in Q4. … EC Business & Consumer Survey …
The question is not whether the ECB’s Governing Council will loosen monetary policy at its meeting on December 3rd, but rather whether it will do so decisively enough to meet the very strong expectations stoked up by its own dovish signals. Anything less …
26th November 2015
The latest comments from Chairman Thomas Jordan suggest that the Swiss National Bank will act decisively to limit franc strength, including through further direct intervention in FX markets. But we doubt that it will be able to prevent some appreciation …
Euro-zone monetary data showed some signs of improvement in October, but continue to point to low inflation and slow growth, strengthening the case for the ECB to increase its stimulus next week. … Euro-zone Monetary Indicators Monitor …
The prospect of a historically large divergence between US and euro-zone monetary policy looks set to push the euro below parity versus the US dollar for the first time since late 2002. … Historic policy split to push euro below …
25th November 2015
Greece has cleared another hurdle with the disbursement of its latest bailout tranche and funds to recapitalise its banks. But until its debt burden is properly addressed, its crisis is not over. … Greek outlook improves but crisis still not …
24th November 2015
November’s German Ifo survey supported the message from other survey indicators that the economy is still growing at a healthy pace. And the breakdown of Q3 GDP showed that, unusually for Germany, consumers are driving growth. … German Ifo Survey (Nov.) & …
Comments from the outgoing governor of Ireland’s central bank that he “knows” that there won’t be another housing bubble smack of hubris. While there does not appear to be a bubble in the housing market at the moment, there is still a risk that one …
23rd November 2015
November’s solid rise in the euro-zone composite PMI suggests that the region’s recovery might regain some pace in Q4 after Q3’s slight slowdown. But we doubt that the outlook has improved enough to dissuade the ECB from increasing its monetary policy …
It goes without saying that the loss of life and the social impact of the Paris attacks dwarf any consideration of their economic consequences. But we doubt that the near-term economic impact will be major. Similar tragedies in Madrid and London had only …
20th November 2015
While fiscal authorities may tolerate increased security spending by some governments after the Paris terror attacks, suggestions that Europe’s budget rules will be swept aside are over the top. … Will the Paris attacks loosen Europe’s fiscal …
18th November 2015
Recent suggestions that Italy has gained the most from QE paint a pretty bleak picture of the policy’s effectiveness. As it happens, we are not convinced that Italy has been the biggest winner. Either way, more needs to be done to support growth and raise …
The German ZEW investor survey showed that easing fears about the global environment led sentiment to improve in November and suggested that the Paris attacks have had little impact on sentiment so far. … German ZEW …
17th November 2015
Norway’s oil and gas sector was not as strong in Q3 as the headline GDP data suggest. And growth in the mainland economy slowed. We suspect that this will prompt the Norges Bank to loosen monetary policy early next year. … Norwegian GDP …
Norway’s oil and gas sector was not as strong in Q3 as the headline GDP data suggest. And growth in the mainland economy slowed. We suspect that this will prompt the Norges Bank to loosen monetary policy early next year. … Norwegian GDP (Q3 …
If there were any remaining doubts that the ECB will bow to the growing pressure to provide additional monetary policy stimulus to the euro-zone’s fragile economic recovery, Q3’s disappointing GDP figures should have put them to bed once and for all. … …
13th November 2015
Today’s Italian GDP data were disappointing and we expect the economy to continue to grow at a fairly slow pace. As a result, the government debt-to-GDP ratio is unlikely to fall over the coming years, leaving Italy at risk of a renewed period of market …
