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With the exception of the automobile and agricultural industries, WTO tariffs are low enough to imply that even if no trade deal is reached, Brexit will do little direct damage to euro-zone exporters. And given the benefits for both sides, it seems likely …
14th July 2016
Office rental growth in Italy is set to be negatively affected by a slowdown in the Italian economy, including weaker employment growth. And coupled with political uncertainty, the office market looks increasingly susceptible to a deterioration in …
13th July 2016
May’s fall in euro-zone industrial production reversed almost all of April’s strong gain and suggests that industry will probably detract from euro-zone GDP growth in Q2. … Euro-zone Industrial Production …
Looking through the massive distortions in the Irish GDP data, today’s Q1 release suggests that the economy has continued to perform well. … Ireland GDP …
Swedish inflation hit a four-year high in June, but it is still low. So although domestic price pressures are rising, the Riksbank may still have to take further policy action. … Swedish Consumer Prices …
12th July 2016
The Riksbank minutes confirm a readiness to act if conditions deteriorate in the wake of the UK’s Brexit vote. But there are signs of diminishing appetite for further measures from some members. … Swedish Consumer Prices (June …
The Dutch economy is more vulnerable than most to a downturn in the UK. In turn, the negative labour market impact could boost support for eurosceptic parties ahead of next year’s elections. … The Netherlands will be hit harder than most by …
11th July 2016
There is no easy solution to the euro-zone’s banking problems, but the risks of doing nothing are too large for policymakers to simply sit on their hands. We think that policymakers will find a way to support the banks. And the forthcoming ECB stress test …
8th July 2016
May’s decline in French industrial production only partly reversed April’s gain but combined with falls elsewhere leaves euro-zone industry looking weak. And Germany’s trade balance fell from its previous record high due to a drop in exports. … French …
After a solid start to the year, Nordic transaction volumes now need only to equal those from the same period last year to set a new annual record. With concerns over UK pricing in the wake of the Brexit vote likely to drive additional capital to the …
7th July 2016
May’s sharp fall in German industrial production adds to the evidence that GDPgrowth in the region’s largest economy slowed sharply in Q2. And the recoverylooks likely to ease further in the second half of the year. … German Industrial Production …
June’s survey data confirmed that GDP growth in Q2 is very unlikely to have matched Q1’s 0.6% quarterly expansion, with both the EC Survey and the PMI appearing consistent with around a 0.3% rise. Industrial production and retail sales data have supported …
6th July 2016
Sweden’s Riksbank has pushed back its expectations for a rate rise. Although the negative impact of previous falls in energy prices on inflation is fading and domestic inflationary pressures are picking up, the Riksbank might still need to intervene in …
Economic uncertainty and lower business and consumer confidence resulting from Brexit are likely to weigh on German GDP growth over the coming 18 months, leading to slower industrial rental growth. Nonetheless, we think investor demand will remain strong, …
May’s euro-zone retail sales data point to a slowdown in consumer spending growth, and thus GDP growth, in Q2. And despite a small upward revision from the flash release, June’s Composite PMI also suggests that growth will slow. … Euro-zone Retail Sales …
5th July 2016
The rally in coal prices over the past month has boosted investor sentiment. Admittedly, production in China, the US and Indonesia has finally started to fall. But prices have now risen to levels which may start to tempt some of that supply back to the …
While German exporters are particularly vulnerable to weaker demand from the UK following the Brexit vote, the economy is also well-placed to benefit from any relocation of financial services or foreign direct investment and less at risk of a drop in …
Portugal and Greece seem have made some good headway towards repairing their public finances so far this year, in contrast with Italy and Spain which are both struggling to make any improvement. Meanwhile, periphery bond markets are so far weathering …
4th July 2016
The commercial construction PMI fell to its lowest level since mid-2009 in June. This highlights the extent to which the uncertainty around the EU referendum was weighing on developers’ activity. The result of the referendum would have done little to …
The UK’s vote to leave the EU has increased the risk of financial sector jobs moving from London to cities such as Dublin, Frankfurt or Paris. Given existing vacancy levels and near-term pipelines, only Paris has the scope to absorb a significant increase …
1st July 2016
On the face of it, Germany seems more exposed than France to the effects of the UK leaving the EU. But in the time before the UK actually leaves the single market, France is more vulnerable than Germany to a downturn in sentiment arising from growing …
May’s fall in euro-zone unemployment shows that the labour market is slowly recovering. But employment growth may already have peaked and there is still too much slack to generate any meaningful wage growth or inflationary pressure. … Euro-zone …
Recent market movements point to a downturn in euro-zone growth, particularly in the periphery. The ECB is likely to respond by loosening monetary policy, but it cannot solve all of the euro-zone’s ills. … Market moves could destabilise the euro-zone …
30th June 2016
June’s rise in euro-zone CPI inflation into positive territory might mark the start of an upward trend, but we see little hope of inflation hitting the ECB’s target over the medium term. … Euro-zone Flash CPI (Jun.) & German Retail Sales …
Italian opposition to the EU is strong and several forces could cause that hostility to grow. October’s constitutional reform referendum will provide voters with an opportunity to oust the prime minister, potentially leading to a general election in which …
29th June 2016
June’s increase in German inflation back into positive territory may well mark the start of an upward trend. But even in Germany, we do not think that inflation is on track to reach the ECB’s near 2% target on a sustained basis. … German Flash CPI …
June’s fall in euro-zone business and consumer confidence suggests that the euro-zone economy was slowing even before the UK voted to leave the EU. … EC Business & Consumer Survey …
While the UK’s vote for Brexit will have only a small direct effect on euro-zone trade this year and next, the indirect effects on confidence and financial markets may be more serious. We have maintained our downbeat forecast of 1.2% GDP growth this …
27th June 2016
Despite unexpected gains for the right in Spain, an anti-austerity left-wing coalition may now be more likely than opinion polls had suggested. Either way, the new government will be a very fragile one. … Spain’s new government set to be a fragile …
May’s euro-zone monetary data suggest that economic growth remains fairly slow. While the ECB has since introduced new stimulus measures, including its latest TLTROs, we doubt that they will boost money and lending growth significantly. … Euro-zone …
The UK’s vote to leave the EU has been followed by calls for referendums in other countries. And , notably, euro-scepticism in some countries seems to be even stronger than in the UK. … Which country might be next to hold an EU …
24th June 2016
The UK’s decision to leave the EU is unlikely to cause a significant decline in aggregate investment activity in continental Europe. However, it could boost investor demand for commercial property in core European cities, at the expense of periphery …
The UK’s surprise vote to leave the European Union has put more pressure on the European Central Bank to provide additional policy support. We now expect an acceleration in the pace of the ECB’s asset purchases and perhaps another small cut in interest …
June’s rise in the German Ifo measure of business confidence suggests that the economy continued to grow at pretty healthy rate in Q2. But given the financial market reaction to the UK’s vote to leave the EU, this seems unlikely to last. … German …
The UK’s vote to leave the European Union will have substantial negative effects on the European economy and raises serious doubts over the future of both the EU itself and the currency union. … UK’s vote to leave EU raises doubts over future of …
The ECB’s decision to reinstate a waiver allowing Greek banks to borrow from it at low interest rates will help to ease pressure on the banking sector. But it is very unlikely to generate a lending revival and it could still be some time before Greece …
23rd June 2016
June’s fall in the euro-zone Composite PMI to a 17-month low suggests that strong GDP growth in Q1 was not the start of a more pronounced economic recovery. Indeed, the PMI points to growth slowing sharply in Q2. … Euro-zone Flash PMIs …
The Norges Bank left its key policy rate unchanged today, but with the economy weak and inflation set to fall, we think that further loosening is on the way. … Norges Bank to cut interest rates in …
Prime retail rents in Athens moved sharply higher in the first quarter. However, a weak economic environment will limit further upside, while also keeping industrial and office rents in check. … Rise in Athens retail rents doesn’t signal a wider market …
The Danish krone would probably face significant upward pressure in the event of a Brexit. But as the Danmarks Nationalbank has scope to loosen policy further, a Brexit is unlikely to break its euro peg. … Would Brexit break Denmark’s currency …
22nd June 2016
Decent economic growth in the Netherlands in the next few years will support office occupier demand. Coupled with low availability for modern space this means that, rather than acting as a brake on rental growth, new completions in the Zuidas (CBD) …
While the Swiss National Bank (SNB) has vowed to limit any impact on the franc if the UK votes to leave the EU tomorrow, we doubt that it has enough ammunition to prevent an appreciation. We think that the currency would rise towards parity with the euro …
If Spain’s upcoming election returns an anti-austerity coalition to power then there would probably be an immediate rise in government bond yields. But whatever the result, much-needed reforms are unlikely to be enacted, growth will slow and borrowing …
21st June 2016
Today’s ruling by the German constitutional court leaves the ECB free to implement its long-awaited OMT programme, if deemed necessary. And a possible trigger for OMTs – Brexit – might be just a few days away. We think the most likely ECB response to a …
June’s ZEW survey suggests that investor sentiment towards the German economy has not been hit by the risk of Brexit so far and points to steady annual GDP growth. … German ZEW …
Prime retail rents in Bucharest have, so far, failed to benefit from the surge in retail sales. But with a robust economic outlook and international retailers increasingly attracted to city, we expect rents to pick up in the second half of the year. … …
20th June 2016
Copenhagen industrial yields have lagged behind the falls seen in the other sectors, as well as those seen for industrial assets in other cities. However, with the occupier market outlook now much improved, in the next three years we believe Copenhagen …
17th June 2016
