Filtered by Region: Europe Use setting Europe
Sweden in the limelight It has been a Sweden-centric week, rounded off with a raft of economic data released this morning. The most noteworthy of which was the second reading of Q3 GDP, which was revised up from the initial estimate (+4.9% q/q versus …
27th November 2020
The cavalry are coming, but not for a few months We are increasingly optimistic that vaccines against COVID-19 will be distributed at least to priority groups in the first half of next year . There are logistical challenges but they look manageable. (See …
20th November 2020
The announcement on Monday of Pfizer & BioNTech’s successful trial of their COVID-19 vaccine was unambiguously good news that sent European stock markets earlier this week to their highest levels since early March. The widespread distribution of a highly …
13th November 2020
Downside risks become central forecast This week, the downside risks to our forecasts continued to crystalise. First, the economic data added to the evidence that activity was slowing even before the new lockdowns in Germany and France were implemented. …
6th November 2020
Time running out on Swiss recovery Data published on Friday showed a smaller-than-expected fall in the Swiss KOF Economic Barometer in October, from a downwardly-revised 110.1 in September to 106.6. This left it above its February level and suggests that …
30th October 2020
Nordics not immune, but comparatively resilient In case you missed it, we released our latest Nordic & Swiss Economics Outlook this week. Of course, virus developments are the key uncertainty. However, assuming that the Nordics continue to avoid the scale …
23rd October 2020
Switzerland in the grip of a second wave The share of virus tests returning positive results in Switzerland doubled in the first two weeks of October and mirrored similar rises seen in Italy and the UK over the same period. At about 7%, the positivity …
16th October 2020
Strong retail sales the outlier, not the norm On the face of it, normality appears to have returned to at least one part of the euro-zone economy. Data this week showed a strong rise in retail sales volumes in August, to 3% above their pre-virus level. …
9th October 2020
Who’s afraid of the Big, Bad US Treasury? Thomas Jordan banged a familiar drum in a speech this week, yet again justifying the SNB’s FX interventions that have seen its balance sheet balloon over the past decade. He also stressed that the Bank’s must have …
Brighter outlook for the NOK next year Having fallen to four-month lows against the euro in late-September, the Norwegian krone and Swedish krona bounced back this week. While the NOK is vulnerable to falling further in the near term, we think that a …
2nd October 2020
The Swiss head to the polls After a virus-imposed hiatus, the Swiss are set to resume doing what they love best this Sunday: voting. Five separate referenda will be held, covering a range of topics including whether the government should buy some new …
25th September 2020
Risk of W-shaped recovery rising This week brought evidence that the economic recovery is grinding to a halt and that activity in the services sector is falling. And with the stringency of virus containment measures only going in one direction, there is a …
A key assumption in our forecasts has been that there will not be a repeat of the spring’s strict nationwide lockdowns that would cause the recovery in economic activity to go into reverse. That assumption is looking a bit shakier in light of headlines …
18th September 2020
Sweden’s virus approach may be bearing fruit Interpreting Covid data is of course part science, part art, but the fact that confirmed virus cases per capita in Sweden fell below those in its Nordic peers in early-September appears to vindicate Sweden’s …
11th September 2020
Riksbank still biding its time Policymakers at the Riksbank won’t admit it, but they will be feeling pretty comfortable with their position, all things considered. After all, the further increase in the services PMI in August suggests that activity in the …
4th September 2020
Euro-zone governments have been understandably keen to avoid repeating the blanket lockdowns of earlier this year in response to the resurgence in coronavirus cases over the past month or so. Low hospitalisation rates have allowed policymakers to focus on …
28th August 2020
Nordics top of the league in H1… The Nordic economies emerged at the top of the economic league in Europe in H1, with comparatively small declines in output. (See here .) The second reading of Swedish Q2 GDP, released this morning, shows that the …
“Two-speed” Swiss industry finds reverse gear The belated release of Q2 industrial production data from Switzerland on Thursday laid bare the stark divergence in fortunes within the sector. Total manufacturing output dropped by 8.3% q/q in Q2, which was …
21st August 2020
Denmark’s lockdown pays off … According to the GDP indicator released on Friday, the Danish economy contracted by 7.4% q/q in Q2, broadly in line with our forecast. While this was its biggest decline since data began in the 1990s, it was a far cry from …
14th August 2020
Taking stock of the latest coronavirus numbers With worries about a major second coronavirus wave in Europe intensifying this week, it is worth taking a step back and putting the current cases numbers in a bit of context. Three trends stand out. First, …
7th August 2020
Huge variations in scale of Q2 contraction The Q2 GDP data published this week highlight that euro-zone member states have had very different experiences of the coronavirus crisis so far, reflecting the variation in the number of virus cases and …
31st July 2020
Mixed messages from the retail data Retail sales data from Switzerland for June, released this morning, show that consumer spending lost a bit of steam at the end of Q2 following the initial sugar-rush as restrictions were eased. Having surged by almost …
The historic agreement reached this week over the EU’s €750bn Recovery Fund has given euro-zone assets a lift. The euro rose from just over $1.14 last Friday to $1.16 at the time of writing, and ten-year Italian bonds yields have fallen from 1.28% last …
24th July 2020
Nordic economies comparatively well placed In case you missed it, we published our Nordic & Swiss Economics Outlook this week. (See here .) The key message is that we forecast the Nordic economies to experience the shallowest recessions in Europe, and our …
This week, governments in France and Italy suggested more stimulus was in the offing to support their economies’ recoveries, consistent with our view that the fiscal cost of the crisis would end up being much bigger than early estimates suggested. Italy …
17th July 2020
“SNB 101” speech targeted at the US Treasury Thomas Jordan delivered the first-ever virtual IMF Central Banking Lecture on Tuesday, which is named in honour of Michel Camdessus, the longest- serving past IMF Managing Director. The video production had a …
Nordics gathered momentum into H2 The June PMI surveys from the Nordics, released this week, add to the evidence that the region’s economies are further down the road to recovery than others in Europe. In Sweden, there was plenty to be encouraged by in …
3rd July 2020
News that German consumers went on a spending spree in May has raised hopes that the recovery will be V-shaped after all and that things will soon be back to normal. We think that only the first part of this is true. The rebound will look like a V, at …
The Bank of France this week provided some more granular evidence of the extent of the slump in its economy. Based on a survey of 8,500 managers undertaken during the lockdown, it estimated the economy was running around 32% below normal levels. It also …
9th April 2020
Norges Bank and Riksbank are ruling nothing out After a bruising week for equities and the Norwegian krone, it is half-encouraging that the Nordic authorities are all singing off the same hymn sheet. Nonetheless, policymakers will not be able to prevent …
13th March 2020
Sell-off concentrating minds The market slump is galvanising policymakers into action. At the time of writing, the Euro Stoxx 50 was 15% below its mid-February peak and the ten-year Bund yield close to its all-time low. (See Chart 1.) This, of course, …
6th March 2020
Pressure building on the SNB to cut rates While the 0.2% increase in Swiss GDP in Q4 2019 was in line with our forecast, attention has understandably moved on to the economic impact of the coronavirus and the coming policy response. There is little in the …
Spread of virus a potential game-changer The ten-fold increase in the number of confirmed coronavirus cases in Europe over the past week has increased the risk of a recession. So long as the virus was confined to China, the main threat to Europe was from …
28th February 2020
Covid-19 dominates proceedings in Switzerland The geographic proximity of Switzerland to Italy has understandably raised fears about the potential spread of the coronavirus. With the number of confirmed cases in Switzerland up to 15 at the time of …
Contrary to what we and the consensus had expected, the euro-zone Composite PMI edged up in February, with both the services and the manufacturing output components increasing. The rise in the PMI echoed the message from other surveys this week, which …
21st February 2020
Support for the current policy stance Speeches this week by members of the ECB Executive Board, Philip Lane and Isabel Schnabel, were clearly part of a concerted effort to rebuff criticism of the ECB’s ultra-loose monetary policy. Ms Schnabel’s talk was …
14th February 2020
Riksbank will need to ease policy soon It was no surprise that the Riksbank left its repo rate on hold at zero percent this week or that it continued to forecast rates staying there until 2022. However, we think that underlying growth and inflation will …
Activity in Norway set to regain pace this year The release of Q4 GDP data from Norway this morning confirmed that the mainland economy lost momentum at the end of last year. The slowdown in quarterly growth, from a downwardly-revised 0.6% in Q3 to 0.2% …
7th February 2020
More disappointing data Data published this week shed a little more light on the euro-zone slowdown in Q4, and the strength of any possible rebound at the start of this year. We won’t get the output or expenditure breakdowns of fourth-quarter GDP until 14 …
Weak growth in Q4 not just a one-off The Q4 GDP data published this week were weaker than we or the consensus had anticipated. And the region’s poor performance was not just down to Germany and Italy, with France’s economy contracting. It’s also not clear …
31st January 2020
Sluggish growth to continue In its latest World Economic Outlook, the IMF this week nudged down its forecast for euro-zone 2020 GDP growth from 1.3% to 1.2%, reflecting slightly weaker forecasts for Germany and Spain. The IMF is not the only organisation …
24th January 2020
The show must go on If it weren’t for constitutional limits on holding snap elections, Norway would be heading to the polls this year after a rift over policy led the far-right Progress Party (PP) to pull out of the current four-party coalition government …
No easy choices for Swiss policymakers The re-inclusion of Switzerland on the US Treasury’s Monitoring List of potential currency manipulators this week did not come entirely out of the blue. Having only been taken off the list in May 2019, we predicted …
17th January 2020
Phase One deal not a game changer for Europe This week brought a mixed bag of news on global trade, but the big picture is that euro-zone export growth is likely to remain slow this year. The main event was of course the Phase One deal between the US and …
News that the headline inflation rate in the euro-zone jumped from 1.0% in November to 1.3% in December, and that the core rate (excluding energy, food, alcohol and tobacco) was unchanged, also at 1.3%, has once again raised the possibility that inflation …
10th January 2020
SNB back in the FX market If staff at the SNB had hoped to ease themselves back in gently after the Christmas break, they will have been disappointed. Data released on Monday indicate that the Bank intervened to weaken the franc last week for the first …
The latest data suggest that the euro-zone economy might have avoided a further slowdown in Q4 last year, adding to the evidence that growth is “bottoming out”. However, the economy seems to have remained sluggish and we don’t think that a recovery is on …
3rd January 2020
Swiss economy still not out of the woods The latest surveys from Switzerland support our view that the economy is likely to continue growing at a fairly sluggish pace over the first half of this year. Admittedly, data published in late December showed the …
Better than 2009 The euro-zone economy is in better shape at the end of the current decade than it was ten years ago. In December 2009, we were writing Updates with titles such as “Greece heads deeper into the mire” and “Austrian banking troubles a sign …
20th December 2019
Lagarde not just Draghi 2.0 In her opening press conference, Christine Lagarde seemed to be just as dovish as her predecessor. Her claim to be an owl, rather than a dove or a hawk, was more of a political gesture than view on policy. And her suggestion …
13th December 2019
