Filtered by Region: Europe Use setting Europe
At the end of last year, Italy fell back into recession but Spain’s economic growth rate accelerated. We think that this divergence will continue. Next week is a quieter one for data releases; we think data for December will show a small rebound in German …
1st February 2019
With risk-free rates expected to stay low, the continued attractiveness of commercial property returns means that investment in 2019 likely to be close to last year’s record level. … Allure of property to keep investment strong in …
Weaker demand, the ongoing transition away from coal and rising supply from Russia will lead to lower European coal prices in 2019. We forecast that the price of Rotterdam coal will fall from $80 per tonne currently to $70 by end-year. … European coal …
31st January 2019
The further drop in the EC’s Economic Sentiment Indicator (ESI) in January adds to the evidence that the euro-zone economy got off to a slow start to 2019. … EC Business and Consumer Survey …
30th January 2019
The latest batch of business surveys suggest that the euro-zone economy may be stalling rather than just slowing. We think the ECB will tweak its forward guidance in March, and will at least consider more radical options soon. Meanwhile, we’re braced for …
25th January 2019
The latest ECB Bank Lending Survey shows that consumers’ and firms’ demand for credit is softening, adding to the evidence that the euro-zone economy has lost momentum. … ECB Bank Lending Survey (Q4 …
22nd January 2019
We think that government bonds in the euro-zone “periphery” will fare quite poorly in the next two years – particularly in Italy and Greece – as growth disappoints and deficits overshoot expectations; European elections raise concerns; and the ECB …
This week saw more evidence that the euro-zone economy has lost a lot of momentum. Meanwhile, the UK parliament rejected the EU Withdrawal Agreement, once again raising the spectre of a no deal Brexit. And in Greece, Prime Minister Alexis Tsipras narrowly …
18th January 2019
The euro-zone should regain some momentum in the coming months, at least compared to its dire performance at the end of last year. But we think the economy will expand by just 1% in 2019 as a whole. Demand in key export partners is set to slow further, …
With plenty of capital still waiting to be deployed and attractive returns on offer, investment in European commercial property is likely to be strong again this year. However, a swing back towards core strategies suggests that investors are increasingly …
In a busy election calendar this year, the focus will be on the rise of populist and euro-sceptic parties. Elections for the European Parliament in May are the most high profile event, but there will also be national elections in Belgium, Portugal, Greece …
17th January 2019
The euro-zone has shifted down a gear but has not (yet) gone into reverse. Italy probably experienced a technical recession last year and Germany only narrowly avoided one. More importantly, the breadth of the downturn, which affected all major countries …
16th January 2019
We think that loose monetary policy and safe-haven flows will keep the German 10-year government bond yield around its current level this year and next. Yields in most other “core” countries are also likely to remain low, although we expect them to rise a …
Sharp falls in industrial production in November last year mean that Germany and Italy may have experienced technical recessions in 2018. And GDP in the euro-zone as a whole probably increased by only around 0.2% in Q4. Meanwhile, officials at the ECB are …
11th January 2019
With interest rates likely to be structurally lower in the future, prime property yields are unlikely to return to historical levels. As such, we have re-weighted our valuation scores to exclude the comparison with the long-term average property yield. …
9th January 2019
Following on from the disappointing German industrial production data released earlier today, the drop in the EC’s Economic Sentiment Indicator (ESI) for December is yet another sign that there was a broad-based loss of momentum in the euro-zone towards …
8th January 2019
Data released this week suggest that the economy lost more momentum at the end of last year and that GDP growth in 2019 won’t be as good as in 2018. … Euro-zone economy continues to lose …
4th January 2019
Commercial property capital values will rise again in 2019, supported by an improved outlook for yields, which will, at a European level, edge slightly lower this year. However, a weakening economic backdrop will also mean that occupier market momentum …
A no deal Brexit is unlikely to provide much support for property in the rest of Europe. The negative impact on euro-zone occupier markets should be modest, but investors, rather than reallocate UK capital to continental markets, are most likely to hold …
21st December 2018
This week, Italy’s Government again showed itself to be more flexible than many had anticipated. But its fiscal problems are far from over and, in our view, public debt still looks unsustainable in the long run. Meanwhile, data released this week added to …
Scandinavian property yields are now set to mark time in 2019 before rising from 2020, despite slowing rental growth. Copenhagen industrial is our top pick for the region. Total returns will be higher in emerging Europe, as yields have more scope to fall …
20th December 2018
Following this week’s ECB meeting, and the latest data on economic growth in the currency union, the chance that the Bank raises interest rates next year has fallen. … ECB dovish as PMI confirms growth …
14th December 2018
With growth in the euro-zone slowing faster than expected and the chances of the ECB delaying its first interest rate hike increasing, property yields are now more likely to plateau next year, than rise. … Property yields to …
London office and retail property are set to produce only middling performance in the next few years, when compared to Western Europe’s other major markets. We think London’s large development pipeline will constrain rental value growth in the office …
12th December 2018
The latest data on economic activity in the euro-zone have been weak, but policymakers at the ECB will have been encouraged by the continued acceleration in wage growth. At its meeting on Thursday, the Bank looks set to confirm that it will end its net …
7th December 2018
With all of the hype around the potential impact of online retailing on industrial occupier demand, there has been a big shift in the relative pricing of industrial assets. Although rents in the UK have surged, supply-side constraints, rather than demand, …
After contracting in Q3, activity surveys suggest that Italy’s economy is on the brink of recession. Indeed, the Composite PMI was unchanged at 49.3 in November, which on past form points to GDP falling by as much as 0.3%. Whether or not the economy tips …
6th December 2018
We think that this week’s decline in Italian bond yields will be reversed before long, weighing on the economy. Meanwhile, data released this week showed that core inflation in the euro-zone edged down to just 1.0% in November. But there are still …
30th November 2018
The sharp drop in oil prices this month supports our long-held view that lower inflation will give consumer spending a boost. And we doubt that the sell-off in the equity market will do much damage to the wider economy. … Fall in oil prices to boost …
23rd November 2018
The number of European property markets that appear to be overvalued continues to rise. With prime property yields still edging lower and government bond yields higher in Q3, the majority of markets recorded a deterioration in valuation scores. What’s …
20th November 2018
The EU looks set to launch disciplinary proceedings against Italy, perhaps as soon as next week. But unless the situation in Italy escalates dramatically, the ECB is unlikely to respond. Instead, the Bank is more focused on the risks to the wider outlook …
16th November 2018
The 0.2% quarterly fall in German GDP in Q3 partly reflected temporary factors, but will still serve as a warning to the ECB to bide its time before communicating any policy normalisation. … German GDP …
14th November 2018
Tensions between Italy and the EU are likely to escalate next week. Indeed, the Government has until Tuesday to submit a re-drafted budget, and despite coming under pressure from European policymakers this week, it is unlikely to make enough changes to …
9th November 2018
The slowdown in quarterly euro-zone GDP growth to just 0.2% in Q3 came as a major disappointment, but there are good reasons to expect the economic expansion to regain a little pace in the quarters ahead. For a start, we estimate that about half of the …
8th November 2018
September’s small rise in German industrial production suggests that delays to car output are not doing quite as much damage as we had feared, but it still seems likely that GDP barely expanded in Q3. … German Industrial Production …
7th November 2018
The EU bank stress tests suggest that even in a severe economic downturn, the region’s largest lenders would remain solvent. That said, the EBA’s very pessimistic “adverse scenario” might still be too bullish if the situation in Italy escalates. … Bank …
2nd November 2018
Delays to car production appear to have had a big impact on GDP in Q3, particularly in Germany and Italy. But these effects should be temporary, so we expect growth to rebound in Q4. This suggests that after stagnating in Q3, Italy is not on the brink of …
The number of retail markets seeing prime rents stagnate or fall is at the highest level since 2009. But there are good reasons why that number is more likely to rise than to reverse over the next year or two. … Prime retail rents increasingly likely to …
1st November 2018
Data on car production imply that delays related to emissions testing may have been entirely responsible for the slowdown in euro-zone GDP growth from 0.4% in Q2 to 0.2% in Q3. While the underlying pace of growth has slowed compared to last year, we …
31st October 2018
The news that Angela Merkel will step down as head of the CDU has limited implications for the German economy since she will stay on as Chancellor for now and her likely successors broadly support her policies. But it may well slow decision-making over …
29th October 2018
Euro-zone surveys published this week painted a pretty gloomy picture of the economy at the start of Q4. Some of that weakness probably reflected temporary factors and the ECB didn’t appear to be too concerned, reaffirming its plans to end asset purchases …
26th October 2018
Although we expect Italian bonds to remain under pressure over the coming years as the country’s fiscal and economic outlook continues to deteriorate, we think that European bond markets are generally less vulnerable to contagion than during the Greek …
25th October 2018
The EU is almost certain to reject Italy’s draft budget. In our view, it is most likely that a re-drafted budget would still fail to meet the EU’s rules, so Italy will probably be put into an Excessive Deficit Procedure. There are other possibilities …
19th October 2018
Prospects for Europe have deteriorated somewhat as slowing global demand has begun to affect exports and a sharp rise in bond yields has darkened the outlook for Italy. Some of the major players should continue to perform very well. The German labour …
17th October 2018
Some of the recent weakness in euro-zone industry, particularly that in Germany, seems to have been caused by hold-ups relating to new emissions tests. While part of this delayed output will probably be made up later, overall industrial growth is unlikely …
12th October 2018
The Italian Government’s fiscal projections, published this week, are based on overly-optimistic assumptions for GDP growth. We expect Italian bond yields to keep rising as the budgetary position worsens by more than policymakers and investors anticipate. …
5th October 2018
The Italian and French governments’ fiscal plans, announced this week, suggest that the headline budget deficit will be similar in both countries over the next few years. But we suspect that the deficit in Italy will be bigger than the official target. …
28th September 2018
We think the Fed is likely to raise interest rates three more times by the middle of next year. By 2020, however, we suspect that Fed officials will reverse course and cut interest rates in response to a slowdown in the economy. Other major central banks …
27th September 2018
The latest data add to the evidence that the slowdown in the euro-zone economy this year has not just been down to a series of “one-offs”. We expect growth to slow further over the next couple of years. Meanwhile, a speech by a member of the ECB’s …
21st September 2018
Our updated yield model points to prime euro-zone office yields rising by only around 5bps by the end of 2020. This is notably less than our forecast, which points to a rise of 20bps in the same period. However, country-specific factors in Italy, in …
20th September 2018
