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While the euro-zone economy has continued to weather the ongoing Greek crisis reasonably well, one potentially worrying recent development is the apparent slowdown in the labour market recovery. Not only did unemployment rise for the first time in nine …
5th August 2015
The sharp drop in euro-zone retail sales in June suggests that consumer spending growth slowed in Q2. But July’s final Composite PMI implies that the wider economy maintained a steady pace of expansion at the beginning of Q3. … Euro-zone Retail Sales …
The Italian economy’s tentative return to growth and recent structural reforms are unlikely to feed into a meaningful labour market recovery for some time yet. So frustrations with Mr Renzi’s reformist Government may build further. … Italy’s recovery and …
4th August 2015
The scale of the damage done to the Greek economy by the country’s renewed crisis and imposition of capital controls looks set to be far worse than the provisional plans for a third bailout envisaged and suggests that Greece is still likely to leave the …
3rd August 2015
Across Europe, only in a few core markets do a majority of RICS members believe that property valuations are expensive. While that boosts the case for commercial property investment generally, it also suggests that due to a limited scope for yield …
The peripheral economies continued to make fiscal progress in June. But halfway through the year, most have much more work to do if they are to meet their 2015 budget targets. The economic deterioration in Greece suggests that it is highly unlikely to …
Belgium has started to reform its labour market and improve its competitiveness. But this will take time to bear fruit, and further work will be needed. Accordingly, over the next few years we expect GDP growth to remain sluggish and debt to stay high. … …
31st July 2015
Looking ahead to this week, we think that euro-zone retail sales data for June will reveal a slight slowdown in annual sales growth. On a country level, indicative of their wider economic performances, we suspect that industrial production growth in June …
Euro-zone inflation was well below target in July and renewed rises in unemployment suggest that disinflationary forces remain strong. … Euro-zone Flash CPI (Jul.) & Unemployment …
July’s inflation data confirmed that price pressures in Germany are very subdued, underlining the need for continued and perhaps increased ECB policy support. … German Flash CPI …
30th July 2015
Ireland's economy went like the clappers in Q1, setting the country up for another year as the euro-zone's fastest-growing economy. … Ireland GDP …
The European Commission’s monthly Business and Consumer Survey for July provided some reassurance that the euro-zone economic recovery has retained some momentum in the third quarter. But growth remains generally sluggish and the case for further policy …
Early interest rate rises in the US and UK will push up bond yields globally. But, with further monetary easing still likely in Europe, we do not expect much of an effect on European assets. We therefore expect European property yields will slowly drift …
The provisional estimate of Swedish Q2 GDP revealed that the economic recovery regained some momentum after the disappointing start to the year. But we doubt that it will prevent the Riksbank from cutting the policy rate further below zero. … Swedish GDP …
While Spain’s economic recovery gathered more pace in the second quarter, the large amount of spare capacity is still sustaining deflationary pressures in the economy. … Spanish GDP (Q2 est.) & HICP …
The spread between government bond yields in Germany and the UK is less indicative of the relative strength of the two countries’ economic outlooks than it was in the past. As such, in contrast to most of the last 15 years, the spread between German and …
29th July 2015
We do not expect any fireworks in EM financial markets after today’s FOMC statement, but with policymakers likely to reiterate that the timing of “lift-off” will be data dependent our upbeat view on key releases in the coming days suggests that there …
Euro-zone current account imbalances have narrowed since the financial crisis, and there are good reasons to think that they will not return to pre-crisis levels for some time. But policymakers’ response to remaining imbalances will continue to impart a …
The majority of European countries recorded a rise in commercial property investment in the second quarter, with the peripheral euro-zone markets generally leading the pack. Despite the latest RICS survey showing that investor sentiment indices have …
28th July 2015
Portugal’s exports have been amongst the euro-zone’s fastest growing over the last few years. But the country’s external position remains very fragile, leaving it vulnerable to renewed market pressures. … Export success masks Portugal’s external …
June’s euro-zone monetary data point to a continued economic recovery, although they suggest that growth will not gather much more pace. … Euro-zone Monetary Indicators Monitor …
27th July 2015
July’s rise in German Ifo business sentiment is an encouraging sign that the recovery has continued despite the Greek crisis, although it does not seem to be gaining much pace. … German Ifo Survey …
Greece last week passed the necessary reforms to start negotiations with its creditors on a third bailout. But with the country back in recession, it will struggle to meet the creditors’ fiscal goals. Indeed, euro-zone fiscal data for Q1 last week showed …
24th July 2015
Greece’s move towards a third bailout has brought relief to Central and South Eastern Europe where concerns about contagion were very real, particularly in the Balkans. While it is too early to say whether there has been a hit to consumer and business …
July’s renewed fall in the euro-zone composite PMI offers some early support to our view that the fragile recovery will slow in the second half of the year. … Euro-zone Flash PMIs …
Today’s weak PMI reading from China will reinforce the negative sentiment towards commodities, notably industrial commodities, but demand should still pick up on further policy easing. Meanwhile, slightly softer numbers from the euro-zone confirm it is …
Despite slowing auto sales in China, we believe autocatalyst demand for platinum and palladium will increase by at least 3% in 2015, helping to underpin our positive view on the prices of both metals. While recent price weakness has prompted us to revise …
23rd July 2015
22nd July 2015
The recent decline in the euro suggests that the markets see the new Greek bailout plan as less favourable for the single currency than a swift Grexit. But the driving force on the euro over the next year or so will be the widening divergence between …
Spain’s and Portugal’s recoveries offer some hope for Italy, the periphery’s laggard. But Italy’s exports are still too uncompetitive and its firms too unprofitable to mimic the export and investment-led recoveries seen in Iberia. So Italy’s colossal …
Even if the planned new Greek bailout is quickly and smoothly implemented, the economy looks set to remain in a deep and prolonged recession. … Will the Greek economy ever return to …
21st July 2015
Even if the planned new Greek bailout is quickly and smoothly implemented, the economy looks set to remain in a deep and prolonged recession. … Greek elections won’t ensure passage of …
20th July 2015
The plan for a third Greek bailout has cleared a number of hurdles over the last week, including provisional approval by the Greek and German parliaments. But there are plenty of obstacles yet to be negotiated, including the fiscal targets, the proposed …
17th July 2015
Real wages have typically fallen sharply after a major currency crisis and devaluation but have then begun recovering within a couple of years. The pace at which they have picked up has varied enormously. In some cases, there has also been a sharp rebound …
The latest European and North American cocoa grinding data continue to point to subdued demand. Combined with a rebound in Ghanaian production, we think that the price of cocoa will fall this year. … Subdued demand will undermine cocoa …
Spanish households will struggle to maintain their recent impressive rates of spending growth. And with households facing years of stagnant wages and high unemployment, opposition to further economic reforms may build. … Spanish households face tougher …
The broader European economy has continued to weather the Greek crisis well, helped by lower oil prices and, in the euro-zone itself, the decline in the euro exchange rate. But these positive forces look likely to fade in the second half of the year and …
16th July 2015
ECB President Mario Draghi maintained a distinctly dovish tone at today’s Governing Council meeting, reiterating the Council’s willingness to step up its QE programme if the economic outlook or financial market conditions worsen. But he was more …
Greece’s future in the euro-zone is still far from secure, and upcoming general elections in Portugal, Spain and Ireland could lead to significant political changes. Nevertheless, given that property markets have generally shrugged off such risks so far, …
May’s euro-zone goods trade data suggested that the depreciation of the euro over thepast year is still only providing a modest boost to export growth. … Euro-zone Trade …
France’s June inflation data confirmed that price pressures remain very subdued in the euro-zone’s second-largest economy. And the substantial slack in the labour market means that core inflation is likely to remain very weak. … French CPI …
15th July 2015
Subdued economic growth and similarly weak office sector demand have resulted in muted take-up volumes in Brussels. The slow first half of the year means that we have trimmed our rental growth forecasts for 2015, and there are also growing risks to our …
14th July 2015
While yesterday’s announcement of an agreement to provide Greece with a third bailout was greeted with understandable relief, there are still very big hurdles to be cleared before the deal is finalised. … Greek “deal” still has major hurdles to …
May’s weak industrial production data and the fall in German ZEW investor sentiment in July suggested that the euro-zone’s fragile recovery may be slowing. … Euro-zone Industrial Production (May) & German ZEW …
The fall in Sweden’s headline inflation rate below zero in June vindicated the Riksbank’s decision earlier this month to cut its policy rate further and extend its bond-buying programme. But we think that it still has more work to do. … Swedish Consumer …
Today’s tentative deal for a new Greek bailout clearly reduces the risk of a near-term exit from the single currency. But significant hurdles must be overcome before the deal is finalised. And the negotiations over debt restructuring, which have been put …
13th July 2015
There appears to be a chance that Greece and its creditors will come to a last minute agreement on a new bailout which avoids an imminent Greek departure from the currency union. But there are many hurdles left to negotiate before the deal is finalised. …
10th July 2015
If a Greek exit from the euro-zone resulted in substantial market turmoil, the ECB would probably respond by unleashing its fabled OMTs. This is a potentially powerful tool to limit contagion. But practical constraints on the size of OMTs, as well as …
