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October’s Swiss, Swedish and Norwegian manufacturing PMIs are consistent with strong growth in industrial output. But only in Sweden do we expect this to put sustained upward pressure on inflation. … Manufacturing PMIs …
1st November 2017
In October, a combination of rising bond yields in the US and lower bond yields at home pushed Nordic and Swiss currencies down against the dollar. Weaker exchange rates, as well as decent economic growth and strong monetary policy support, gave equities …
30th October 2017
While the ECB’s announcement that its asset purchase programme will now run until September 2018 and at a slower pace from January was largely in line with consensus forecast, its decision to keep the programme open-ended struck a dovish note and pushed …
26th October 2017
Q3 investment in mainland European commercial property was the highest on record for a third quarter, despite pricing concerns. At the same time, a lack of prime assets in key markets appears to be lifting demand in second-tier markets. … Valuation …
24th October 2017
Politics are in focus yet again, with the German and Austrian elections revealing reduced support for mainstream parties and the push for Catalan independence creating much uncertainty. But business and consumer confidence have been encouragingly …
August’s surge in German industrial production was in line with the positive message from business surveys and puts the economy on course for a strong Q3. … German Industrial …
9th October 2017
August’s labour market data won’t deter the ECB from announcing later this month that it will taper its asset purchases next year. But the only gradual recovery in the labour market suggests that the Bank will wait a long time before tightening policy …
2nd October 2017
Among the wide range of proposals for the EU put forward by French President Emmanuel Macron this week was the introduction of a euro-zone finance minister and a euro-zone budget. In principle, we think that this would be a good idea. Indeed, we have long …
29th September 2017
September’s weaker-than-expected euro-zone inflation data won’t stop the ECB from announcing in October its plan to taper its asset purchases next year. But the data suggest that the Bank will proceed cautiously when it comes to normalising monetary …
Tighter monetary policy in the UK, US and euro-zone in the next couple of years will undoubtedly cause risk-free rates to rise. However, given that property’s yield spread against risk-free rates is still elevated, we think there’s room for a gradual …
21st September 2017
The next stage of monetary policy normalisation in the developed world – balance sheet reduction by the US Fed, and the shift towards QE tapering in the euro-zone – will not have a major impact on Emerging Asia. Instead, domestic factors will determine …
15th September 2017
European occupier markets have continued to benefit from the strengthening economic environment. Low risk-free rates still provide some limited scope for prime yields to fall. But as government bond yields eventually rise further, this will start to put …
11th September 2017
Retailers in Lisbon are currently benefiting from a number of tailwinds. With occupiers focusing more on high street locations and limited prime vacancy, we have revised up our rental growth forecasts. … Increasing focus on high streets boosts prime rents …
1st September 2017
A slowdown in German employment growth is set to take to the edge off office occupier demand growth. But with supply staying tight, prime office rental growth will ease, rather than grind to a halt. … Softer demand isn’t a disaster for German office …
25th August 2017
Small rises in core government bond yields, along with similar-sized falls in equity dividend yields and limited commercial property yield falls mean that property valuations were mostly unchanged. That said, around a third of the markets we cover look …
18th August 2017
Demand for office space in Madrid’s CBD has seen prime rents rise by 5% so far this year. And while completions are on the rise, this is being offset by withdrawals. With the market likely to tighten faster than previously expected, we have increased our …
17th August 2017
Euro-zone investment jumped 31% in Q2 compared to the same period last year. However, there are signs that suggest that the market is cooling, with the quarter recording the weakest decline in prime yields in the past year. As a result, capital value …
14th August 2017
Monetary conditions remain highly supportive of economic activity, and should continue to be so in the years ahead. While we expect the Fed to begin winding down its balance sheet in Q4 and the ECB to taper its asset purchases next year, the era of global …
10th August 2017
Competition from prime shopping centres and questions about affordability mean that prime high street rents in Vienna will struggle to keep pace with inflation over the coming years, leading to further declines in real rental values. … Vienna retail rents …
9th August 2017
Office space in Paris’ CBD is in short supply and tenants are having to compete for larger floorplates. This will push prime rental values up at above-inflation rates of 3% and 4% respectively in 2018 and 2019. … Steady first half cloaks the positive …
4th August 2017
With better rental growth prospects for prime property in Italy, compared to secondary, we think that a continued focus by investors on prime assets will see yields edge down over the next 18 months. … Investors focus on prime property in …
2nd August 2017
The euro-zone’s efforts to put its public finances in order continued in Q1, with the region’s budget deficit shrinking to its lowest level since mid-2007. And timelier central government fiscal data suggest that most of the peripheral countries continued …
1st August 2017
Euro-zone GDP in the first half of the year was a little weaker than expected. But the Q2 outturn may yet be revised up, and with surveys pointing to continued fairly strong growth at the start of Q3, we remain optimistic about the economic outlook. … …
This week, the euro reached its highest level against the US dollar since before QE began. It would probably take a much larger appreciation to knock the economic recovery completely off course. But a further rise would weigh on inflation, and could …
28th July 2017
July’s EC survey points to a sharp acceleration in euro-zone GDP growth. But we doubt that the economy will perform quite as well as the survey suggests. And with inflation expectations low, tighter monetary policy is a long way off. … EC Business & …
The 15% annual rise in European (ex. UK) Q2 investment was wholly dependent on the logistics sector. Indeed, activity in the office and retail sectors fell. But with investors in a buoyant mood, 2017 is likely to be another record year for investment, …
27th July 2017
June’s euro-zone money and credit data point to downside risks to growth. But firms and consumers have scope to fund extra spending without borrowing, and with confidence high, we remain optimistic about the economic outlook. … Euro-zone Monetary …
Very low Grade A vacancy and steady net absorption are likely to see Brussels rental growth forecasts for this year blown out of the water. We think rents could climb by 12% and a further 3% in 2018. … Brussels prime office rental prospects looking …
25th July 2017
Preliminary PMIs, which were published by Markit today, suggest that manufacturing growth in advanced economies started Q3 on a strong note. … Flash PMIs …
24th July 2017
Perhaps against the prevailing perception, rather than retail, it has been the manufacturing sector that has been a key driver of rising industrial demand in Germany over recent years. With a supportive economic outlook for occupier demand, we envisage …
18th July 2017
In our last Global Policy Watch, published in April, we argued that aggregate fiscal policy in advanced economies was likely to be loosened slightly in the coming year or two. Since then, the chances of a substantial fiscal boost in the US have diminished …
Government bond yields have risen recently by more in Germany than in some “peripheral” countries of the euro-zone. This has happened even though the sell-off in bonds has been caused by concerns that the ECB will scale back its purchases, from which the …
14th July 2017
European investment activity is likely to have risen again in Q2. But, while retail funds are competing aggressively for core assets, opportunistic investors appear to be rotating out of low-yielding prime assets. We see this as an attempt to achieve …
Euro-zone member states appear to have put their public finances largely in order now, with the European Commission deeming this week that even Greece has made sufficient progress to become compliant with European fiscal rules. However, while fiscal …
The fall in Ireland’s GDP in Q1 is not a major concern. The data are notoriously unreliable as a measure of underlying activity, and other indicators suggest that the economy is performing well. We continue to expect Ireland’s economy to grow at a fairly …
The widening of the euro-zone’s trade surplus in May adds to signs that GDP growth may have accelerated in the second quarter. And in contrast to the situation last year, we expect net trade to boost euro-zone GDP growth in the quarters ahead. … Euro-zone …
We expect the ECB to renew its hints of future QE tapering at its forthcoming meeting, despite the modest tightening of financial market conditions that such hints have caused already. We still see the Bank tapering its purchases to zero in the first half …
13th July 2017
May’s sharp rise in euro-zone industrial production left it at its highest level since September 2008 and bodes very well for GDP growth in Q2. … Euro-zone Industrial Production …
12th July 2017
Germany’s current account surplus has been quite stable in recent years and has not, therefore, been a major drag on global demand. That said, in the unlikely event that it significantly eases up on fiscal policy, Germany could help to boost global demand …
11th July 2017
Household debt has remained elevated in the euro-zone as a whole, but there has been significant deleveraging in the countries that needed it most. Given positive trends in the labour market, we expect households across the region to withstand ECB policy …
Headline inflation in Norway slowed in June, and we think that it will fall further. Over the next few years, it is likely to remain below the Norges Bank’s target, so we think that interest rate hikes are a very long way off. … Norwegian Consumer Prices …
10th July 2017
May’s industrial production data for Germany, France and Spain show that output rose sharply across the board. This suggests that overall economic growth in the euro-zone accelerated further in Q2 from what was already a healthy pace. … German, French & …
7th July 2017
The EU-Japan trade deal is unlikely to have a major impact on euro-zone GDP growth. In the context of US President Trump’s protectionist leanings and the UK’s impending exit from the EU, the deal is a powerful symbol of the Union’s pro-globalisation …
6th July 2017
While euro-zone headline CPI inflation fell to 1.3% in June, the core rate, which excludes the volatile food and energy components, rose from 0.9% to 1.1%. This left it above the 0.8% average recorded since the start of 2014, suggesting that underlying …
5th July 2017
The euro’s rise has not yet been sharp enough to cause a significant tightening of monetary conditions and we doubt that it will dissuade the ECB from tapering QE next year. But a further appreciation might cause the Bank to opt for a long taper or to …
By indicating that it no longer expects to cut interest rates, the Riksbank has taken a small step toward monetary policy normalisation. While the Bank indicated that it will continue to guard against a rapid appreciation of the krona, we expect its …
4th July 2017
Government bond yields in the Nordic and Swiss economies have risen recently, and for the most part we expect this to continue. Yields in Sweden are likely to rise the furthest, while those in Switzerland will only edge higher, and in Norway they may even …
3rd July 2017
While the euro-zone unemployment rate was unchanged in May, survey indicators point to strong employment gains ahead. Nevertheless, the high degree of slack in some countries suggests that it will be some time before wage growth and inflation pick up …
The Nordic and Swiss PMIs strengthened in June, pointing to faster manufacturing growth. The Swedish survey suggests that inflation will fall, probably reflecting energy effects. But we still expect strong economic growth to push core inflation up this …
ECB President Draghi’s speech earlier this week prompted investors to re-assess the outlook for monetary policy. They now seem to expect the Bank to raise interest rates around the middle of next year. However, nothing in his speech changes our view that …
30th June 2017
