Filtered by Region: Europe Use setting Europe
The EU’s and, particularly, Germany’s trade practices have been criticised heavily by President Trump, prompting him in early July to label the trade bloc “as bad as China”. However, from a global perspective, neither their bilateral surpluses with the US …
20th July 2018
Having announced last month that asset purchases will end in December, the ECB is unlikely to make any policy changes at its July meeting. We doubt that President Draghi will offer more explicit forward guidance than to reiterate that interest rates will …
19th July 2018
Ireland’s GDP contracted in Q1, but this tells us next to nothing about the underlying state of the economy. Other indicators are much more encouraging and, despite some big risks to the outlook, we think that the economy will continue to perform well. … …
Most European economies have experienced a slowdown since last year, but growth is still strong by historic standards and prospects are fairly bright. Admittedly, trade protection poses a serious threat, particularly to the most open economies like …
Growing occupier demand for industrial units close to the German and Austrian borders will offset the slower economic growth that we are expecting in the next few years in the CEE markets. This will prompt growth of the industrial stock in those areas and …
18th July 2018
In an otherwise quiet week, the main economic news was the publication of the minutes of June’s ECB meeting. They showed that members of the Governing Council “widely agreed” to update their forward guidance, which now states that interest rates will be …
13th July 2018
May’s strong increase in euro-zone industrial production offered welcome reassurance that the slowdown in GDP growth in Q1 did not mark the start of a downward trend. … Euro-zone Industrial Production …
12th July 2018
A positive economic outlook for Belgium and a shortage of available Grade A stock bode well for office rents in Brussels. Foreign investors, in particular, are increasing exposure to the market as it also offers above-average income returns. We therefore …
11th July 2018
The further decline in German ZEW investor sentiment seems to reflect concerns about the impact of possible protectionist measures. But May’s industrial production data for France and Italy support the message from the earlier German release that Q2 was a …
10th July 2018
Immigration has remained very high up the political agenda this week, and while EU leaders reached a compromise on Monday, this is not a closed issue and tensions may well flare up again. Meanwhile, the news on the German economy has been much better this …
6th July 2018
Hard data relating to euro-zone activity in Q2 have been a little disappointing so far, denting hopes that GDP growth would rebound strongly after Q1’s 0.4% quarterly expansion. Industrial production declined by 0.9% m/m in April, while retail sales fell …
5th July 2018
Record investment activity in Denmark underscores the positive outlook for returns in Copenhagen, especially in the industrial sector, which we expect to be the best-performing market in Western Europe. … Healthy outlook for returns supports case for …
4th July 2018
In our opinion, this week’s media coverage of the June EC and Ifo surveys was too downbeat. Both indicators are still consistent with annual GDP growth of over 2%. Other data told a familiar story of subdued underlying price pressures. Meanwhile, at this …
29th June 2018
As rising US Treasury yields have squeezed US property’s yield gap over the risk-free rate, investment volumes have dropped back and core office yields are rising. While Europe is lagging the US, there are good reasons to believe that European property …
The big news this week was that Greece is finally emerging from a period of eight years under bailout programmes. But our judgement remains that the risks of a future Greek default and/or euro-zone exit are significant. Meanwhile, comments at the ECB’s …
22nd June 2018
Given the strength of their labour markets, wage inflation is likely to pick up a bit in the US, UK and, to a lesser extent, the euro-zone and Japan over the coming quarters. But as Jerome Powell remarked in a speech earlier today, it generally looks set …
20th June 2018
Benchmark equity indices in Italy and Spain have outperformed those elsewhere in Europe in the past days. But while the reasons for this may continue, they remain vulnerable to political risks. … Will Italian and Spanish equities remain safe …
The Swiss and Nordic central banks are unlikely to follow the ECB in announcing significant changes to monetary policy over the next month. … Will the Swiss and Nordic central banks follow the …
18th June 2018
Over the last decade, Helsinki, Oslo and Stockholm have experienced a reduction in floorspace per employee. As a result, firms have been able to pay higher prime rents than previously. We think that this trend has further to run, meaning that, even though …
15th June 2018
The ECB finally announced this week that the end of its asset purchase programme is in sight and that rates will stay on hold at least until the second half of 2019. But the ECB is not on auto-pilot until next September: Mr Draghi was keen to stress that …
The pick-up in euro-zone wage growth in Q1 is another sign that the economy is moving in the right direction. Over the coming years, we think wage growth will continue to rise, but only gradually. So we still think that the ECB will wait until September …
The ECB announced today that its asset purchase programme will end in December. But its other communications reinforced our long-held view that interest rates will not rise until at least September 2019. And the Bank kept the door open to renewed asset …
14th June 2018
Fears that the euro-zone’s recovery is going into reverse seem overdone. Weakness in Q1 related partly to temporary factors, the effects of Italian political turmoil have been contained and prospects for domestic spending are strong. But the long-term …
13th June 2018
April’s fall in euro-zone industrial production adds to the evidence that the economy has not rebounded strongly since Q1’s slowdown. Nevertheless, with more timely survey measures of activity still at pretty high levels, we think that the euro-zone …
A solid employment growth outlook, combined with relatively small development pipelines will enable a weighted average of Western European office rents to climb by around 8% p.a. in the 2018-20 period. However, a shortage of modern stock in central areas …
12th June 2018
The economic backdrop continues to be supportive of occupier markets, in spite of the euro-zone’s weaker-than-expected start to the year. But with the growth expected to slow, investment volumes treading water, and yield compression fading out, the market …
8th June 2018
The cycle in Scandinavia and Switzerland is showing signs of turning, with investment activity down compared to 2017 and 2016. The prospects are brighter in Emerging Europe, where yields are likely to fall throughout 2018 and even into 2019 in some cities …
Italy’s new prime minister, Giuseppe Conte, gave his maiden speech to parliament this week, and his comments riled the markets. After all, he reiterated the Government’s intentions to cut taxes significantly and introduce a minimum citizen’s income, both …
Although Italy is likely to stay in the euro-zone for the foreseeable future, recent political developments have resurrected the possibility of it leaving at some point and raised the issue of how Italy would settle its big TARGET2 liabilities. The upshot …
7th June 2018
Politics have captured the limelight over the past month. Bond yields in Italy have risen sharply over the past few weeks as concerns about debt sustainability and the new government’s commitment to the euro have mounted. Italian 10-year bond yields are …
The third estimate of euro-zone Q1 GDP confirmed that the slowdown in growth was caused by net trade. While the latest evidence suggests that growth is unlikely to pick up much in Q2, it should still be stronger than the euro-zone’s long-run potential. … …
April’s euro-zone retail sales data imply that the consumer sector fared a little better in Q2 than it did in Q1. Nevertheless, May’s Composite PMI is consistent with the pace of GDP growth remaining at around Q1’s pace, suggesting that growth has shifted …
5th June 2018
In any other week, the imposition of tariffs on the EU by the US would have taken centre stage. But amid the political and market turmoil in Italy and the downfall of Spain’s government, this was no normal week even for the euro-zone. The risks of a …
1st June 2018
The recent political turmoil in Italy gave the Swiss franc and Nordic & Swiss government bonds a boost at the end of May as investors sought safe havens. Stronger exchange rates weighed on equities in Switzerland and Sweden, but Norway’s stock market …
31st May 2018
After reaching an eight-month high in May, core inflation looks set to rise further. Moreover, recent increases in oil prices will push headline inflation above 2% next month. While the recent drama in Italy creates a headache for the ECB, we doubt that …
The fallout from the latest political turmoil in Italy has so far been contained, with limited impact on other euro-zone countries’ financial markets. There are good reasons to expect this to remain the case in the near term. But the size of Italy’s debt …
30th May 2018
In the absence of a sharp surge in euro-zone inflation, a fresh recession or protracted stagnation, or a major escalation of current political tensions, property yields are more likely to drift slowly higher over the next few of years, than to spike. … …
After falling only slightly in May, the EC’s measure of economic sentiment provides some reassurance that the softness in activity in Q1 does not mark the start of a sharp slowdown. … EC Business & Consumer Survey …
The Swedish economy made a strong start to 2018 and the outlook is positive. Healthy growth is set to drive wage growth gradually higher, prompting the Riksbank to raise interest rates at the end of this year. … Swedish GDP (Q1) & Swiss …
If sentiment towards Italy deteriorates as a result of the current political situation, we could see renewed capital flight and a further worsening of Italy’s already-high TARGET2 liabilities. But other euro-zone countries may refuse to tolerate any …
29th May 2018
April’s euro-zone money and lending data provide further evidence that economic growth has peaked. While households’ and firms’ demand for loans is still fairly strong, the deteriorating situation in Italy is a key risk to the outlook. … Euro-zone …
The “account” of the ECB’s April meeting, released this week, revealed that policymakers had taken a pretty sanguine view of the weakness of survey indicators and hard data in the first few months of the year. Indeed, Council members believed that …
25th May 2018
Although property yields ticked down only slightly in Q1, rises in both government bond yields and equity dividend yields meant that property valuations deteriorated. For the first time since we have been producing valuation scores, the majority of our 93 …
23rd May 2018
May’s fall in the euro-zone PMI yet again partly reflected temporary factors, but the continued softness of the surveys in Q2 is certainly a concern. … Euro-zone Flash PMIs …
Data released this week added to the evidence that soft global demand and the previous appreciation of the euro have taken a toll on euro-zone exports. We doubt that exports will regain all of their lost momentum, but growth should pick up in the coming …
18th May 2018
A number of indicators suggest that the current cycle is running out of steam. Although investment across the euro-zone was up compared to the first quarter of last year, on a four-quarter basis, it appears that it may well have peaked. At the same time, …
Economic growth is likely to have softened in both Western Europe and Emerging Europe in Q1. Nevertheless, take-up of office space stayed strong and rental values in all three sectors were stable or rose, with the exception of Istanbul. Investment …
One year into President Emmanuel Macron’s term, the French economy is performing well. Annual GDP growth is healthy and the labour market is recovering steadily. But this owes little to Macron’s efforts so far, reflecting instead the impact of previous …
11th May 2018
Euro-zone GDP data for Q1 were pretty weak. Indeed, quarterly growth in the euro-zone economy slowed from 0.7% in Q4 to just 0.4%, its weakest rate since Q3 2016. And national data showed that growth declined in France and remained subdued in Italy, while …
9th May 2018
As the ECB starts to tighten monetary policy, higher risk-free rates are likely to put upward pressure on property yields. However, we think that real equilibrium interest rates are now lower than in the past. As a result, property yields are unlikely to …
8th May 2018
