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The Swiss National Bank’s decision to leave policy on hold came as no surprise as easing Brexit fears and the ECB’s inaction have led upward pressure on the franc to abate. But the SNB made clear that itwill renew its currency interventions if needed. …
15th September 2016
The “Juncker plan” has done little to boost investment. Accordingly, an extension of the scheme, proposed by President Juncker this morning, is unlikely to raise the euro-zone’s growth prospects. … Extension of “Juncker plan” would not be a …
14th September 2016
Looking through the massive distortions in the Irish GDP data, today’s Q2 release suggests that the impressive recovery might have slowed. And survey evidence suggests that growth has slowed further since the UK’s vote to leave the EU. … Ireland GDP …
The weakness of euro-zone industry in July suggests that industrial production will struggle to expand at all over Q3 and doesn’t bode well for GDP growth this quarter. … Euro-zone Industrial Production …
As euro-zone inflation picks up over the coming months, short-term inflation expectations should rise.But long-term expectations are less responsive to movements in current inflation and are likely toremain very low. We think that the ECB will eventually …
13th September 2016
The fact that ZEW investor sentiment was unchanged in September despite the easing of fears about the effects of Brexit adds to signs that underlying growth in the German economy is set to slow. … German ZEW Survey (Sep.) & Euro-zone Employment …
Despite weaker-than-expected Swedish inflation in August, price pressures are set to increase in the coming months. And as higher inflation feeds through to inflation expectations, the Riksbank will need to start to thinking about tightening policy. … …
Since the UK’s Brexit vote, eurosceptic parties elsewhere have increased their calls for referendumson EU or euro membership. While the potential for eurosceptics to gain power and hold votesvaries widely across Europe, growing unrest over the issue looks …
12th September 2016
The UK’s decision to leave the EU has weakened the economic outlook for the euro-zone and increased expectations that the ECB will keep monetary policy looser for longer. While slower economic growth is negative for the property rental outlook, the …
9th September 2016
In the wake of the UK’s vote to leave the EU, central banks have signalled a looser monetary policy stance ahead. Nevertheless, we expect economic growth to be weaker, which has led us to reduce our rental growth forecasts in most markets. But, looser …
The ECB’s decision last week not to announce an extension to its asset purchase programme led us to revise our year-end forecast for the euro exchange rate. But we still think that looser monetary policy will eventually weaken the single currency. … …
President Draghi suggested today that a dramatic increase in ECB policy support is not imminent. But we still expect the Bank to extend its QE programme by six months to next September and it may yet have to increase the pace of its assets purchases next …
8th September 2016
The first official euro-zone data release for July – retail sales – suggested that the consumer sector made a strong start to Q3. Indeed, the 1.1% rise in sales pushed the annual growth rate up to 2.7%, its strongest in five months. However, this is …
With the Riksbank on hold, rising inflation means that real interest rates in Sweden are set to dropto a 40-year low. Such an accommodative stance seems unnecessary given the sound economic outlook and we suspect that the Bank will raise interest rates …
7th September 2016
July’s drop in German industrial production may have partly reflected temporary factors, but it provides a very weak base for GDP in Q3. The industrial sector should resume its expansion in the coming months, but at a fairly slow pace. … German …
With the Riksbank on hold, rising inflation means that real interest rates in Sweden are set to drop to a 40-year low. Such an accommodative stance seems unnecessary given the sound economic outlook and we suspect that the Bank will raise interest rates …
Today’s final estimate of Q2 GDP confirmed that the slowdown in growth from the first quarter was largely due to household spending. Over the rest of the year, we think that consumer spending will remain subdued, while export growth will slow. … Euro-zone …
6th September 2016
Q2’s healthy rise in Swiss GDP suggests that the economy was coping well with the franc’s continued strength, but the increase was flattered by temporary factors. And while CPI inflation edged up in August, deflationary risks remain acute. … Swiss GDP …
As Mariano Rajoy would benefit most from another election, his opponents may yet let him form a government. But with the public finances deteriorating and the deadline for the 2017 budget to be submitted to the European Commission looming, the risk of …
5th September 2016
Euro-zone government finances at the start of the third quarter of 2016 were much more of a mixed bag than the reasonably impressive figures from the first half of the year. Worryingly, the data suggest that Portugal and Spain, having recently avoided …
Euro-zone retail sales started Q3 strongly but growth is set to slow in the coming months. Indeed, the downward revision to August’s euro-zone Composite PMI hints at the challenges facing the economy during the remainder of the year. … Euro-zone Retail …
Euro-zone equity prices have risen so far in Q3, painting a more optimistic picture of the economy’s performance than the consumer and business surveys. However, there are two reasons why we think that the surveys, which suggest that growth might have …
2nd September 2016
Despite a slowdown in Spain’s economic recovery, growth is still expected to be healthy, providing a positive backdrop for industrial rental growth in Barcelona and Madrid. And with industrial pricing appearing far from stretched, investor interest is …
Recent news on the economy has reduced the pressure on the European Central Bank (ECB) to provide further policy stimulus at its forthcoming policy meeting on 8th September. But the weakness of price pressures in the region could still prompt the …
1st September 2016
In the first half of 2016, prime office rental values in Paris have already matched the full year increase predicted by the IPF consensus forecasts. With take-up strong and a limited supply of quality space in central areas, we think that rental growth is …
The unchanged headline inflation rate in August highlights the fact that price pressures in the euro-zone remain weak and boosts the case for more monetary easing from the ECB. … Euro-zone Flash CPI (Aug.) & Unemployment …
31st August 2016
The hit to Norway’s GDP growth from lower oil prices appears to be fading. Nevertheless, with growth still fairly slow and inflation set to fall sharply, we still expect the Norges Bank to loosen monetary policy this year. … Norwegian GDP …
In Q2 Danish GDP growth was worryingly dependent on external demand and a drop in imports, while survey indicators suggest that the economy will struggle to grow over the coming months. … Danish GDP (Q2 …
The hit to Norway’s GDP growth from lower oil prices appears to be fading. Nevertheless, with growth still fairly slow and inflation set to fall sharply, we still expect the Norges Bank to loosen monetary policy this year. … Norwegian GDP (Q2 …
August’s slowdown in German inflation was weaker than most forecasters had expected last week, but was broadly consistent with the state-level data released this morning. While inflation should pick up in the coming months, we do not think that it is on …
30th August 2016
August’s euro-zone Business and Consumer Survey suggests that growth has slowed and inflation expectations are weak. So the ECB will be under pressure to loosen monetary policy further at its meeting next week. … EC Business & Consumer Survey …
Italy’s forthcoming referendum on constitutional reform is expected to take place in October or November. If the reform is accepted, it could make governments more stable and passing legislation easier. However, if it is rejected, Italy will be in for a …
26th August 2016
Stronger economic growth in Q2 helped to prevent further falls in the majority of prime retail and industrial rents across the central and eastern European region. Rents may, therefore, have found a floor. At the same time, investment activity rose, with …
The euro-zone Composite PMI has held up well since the UK’s Brexit vote, but it is too soon to sound the all clear. After all, the Composite PMI measures current output rather than indicating how conditions might develop. Forward-looking indicators have …
All-property euro-zone rental values increased by 0.9% q/q in Q2, up from 0.4% q/q in Q1, as office rents rose at the fastest quarterly rate since the financial crisis. At the same time, yields fell for the sixteenth consecutive quarter and have now …
July’s money and credit data show a pick-up in lending growth, despite concerns about banks’ health and the UK’s vote for Brexit. Nevertheless, the data suggest that inflation will remain weak. … Euro-zone Monetary Indicators Monitor …
August’s sharp fall in the German Ifo survey points to a slowdown in annual German economic growth to around 1%. … German Ifo Survey …
25th August 2016
Some have argued that a new trade deal between the EU and Indonesia may arrest the decline in the latter’s exports of tin. However, structural issues constraining tin exports mean that it is unlikely that any agreement would provide much of a boost to …
Today’s rate cut by the Sedlabanki is likely to be a one-off. Indeed, the recent acceleration of economic growth suggests that the risks to the Bank’s new inflation forecasts are tilted to the upside. … Rate cut in Iceland set to be a …
24th August 2016
August’s slight rise in the euro-zone Composite PMI suggests that, while the region has so far weathered the UK’s Brexit vote, economic conditions remain fairly subdued. … Euro-zone Flash PMIs …
23rd August 2016
The sharp rise in Portugal’s bond yields last week reflected justified concerns about the government’s credit rating. While the Government intends to stick to the EU’s fiscal rules, slow economic growth will leave its credit rating in doubt for some time. …
22nd August 2016
Property yields fell again in Q2 as demand for prime property remained strong. But, with mostbond yields falling in the second quarter, property still looks fairly valued. … Lower bond yields counteract falling property …
19th August 2016
Most information about Germany implies that the economy has continued to perform well after the UK’s Brexit vote. The main exception is the ZEW survey, which suggests that GDP growth could drop to zero. However, while the ZEW shouldn’t be disregarded …
If the ECB is to accelerate and extend its asset purchases next month as we anticipate, it will need to address the programme’s limitations, particularly relating to German debt. We think that the ECB could buy a higher proportion of the Bunds that are …
18th August 2016
With Dutch housing investment back at pre-crisis levels, there is little scope for further strong growth. And although interest rates are at record lows, surveys suggest that firms have little need to boost investment. As a result, Dutch investment growth …
17th August 2016
With Lisbon office and retail valuations looking increasingly stretched, and periodic spikes in Portuguese government bond yields, the risks to property market pricing appear to be on the rise. … Should investors be concerned about Lisbon …
August’s German ZEW investor survey shows that sentiment has partly recovered from July’s Brexit-related decline, but it still points to a sharp slowdown in German GDP growth to come. … German ZEW Survey (Aug.) & Euro-zone Trade …
16th August 2016
