Filtered by Region: Europe Use setting Europe
Brussels office vacancy has been falling, but this is mostly attributable to the conversion of obsolete stock to residential uses, rather than expansionary activity. And with economic growth in Belgium appearing to falter in recent months, we have cut our …
10th February 2015
Tomorrow’s meeting of euro-zone finance ministers (the “Eurogroup”) takes place against a background of extreme urgency to meet Greece’s near-term financing needs. While some solution appears possible, it won’t address Greece’s longer-term debt problems. …
January’s falls in Swiss and Danish CPI inflation into or further into negative territory highlight the need for central banks to do more to prevent their respective currencies appreciating further and tackle the threat of a long and damaging bout of …
With Greece once more dominating the headlines, officials from the US and elsewhere are likely to have used the G20 meeting in Istanbul to urge euro-zone governments to do all they can to prevent the crisis from spiralling out of control. However, the …
9th February 2015
After a year of stability, Central Europe’s currency markets sprung back to life over the past month as the ECB unveiled a QE programme and the Swiss National Bank (SNB) decided to scrap its exchange rate ceiling. In this Watch we explain why, although …
The Greek Government may need to resort to capital controls to prevent the flow of deposits from its banks, particularly if the ECB withdraws access to central bank funding altogether. But once the considerable costs of such controls had been borne, it …
The latest bout of deflation in the euro-zone looks set to last rather longer than the brief period of falling prices seen back in 2009. With vast amounts of slack in the economy and inflation expectations falling, there is a bigger risk that deflation …
Several developments last week arguably brought Greece closer to exiting the euro-zone than it has ever been. While the Government appeared to give ground on its demands for debt restructuring, its terms still seem unpalatable to the Troika. And the ECB’s …
6th February 2015
The latest fiscal data suggest that the peripheral economies continued to strengthen their budget positions at the end of last year. But many look set to have missed their 2014 targets and Greece’s fiscal progress may be reversed following Syriza’s …
December’s industrial production data for Germany and Spain show few signs that the export-sensitive areas of the euro-zone economy have yet received a boost from the drop in the euro exchange rate. … German & Spanish Industrial Production …
Euro-zone economic activity has continued to recover despite the troubles in Greece. For now, worries about the crisis seem to have been offset by the benefits of a weaker euro and falling producer and consumer prices. Note, for example, that while the …
5th February 2015
Calculating implied yield expectations from RICS commercial property survey results suggests that respondents believe yields are close to their troughs in most office markets. Yet given that the spreads of office yields over bonds are close to record …
Despite the strong performance of equities in the euro-zone so far this year, we think there is more upside for those in Japan. Our end-2015 forecast for the DAX is 11,000, which is barely above its level today, whereas our forecast for the Nikkei 225 is …
4th February 2015
European gas prices have been under downward pressure since early 2014. Given the plunge in oil prices, plentiful LNG supplies and high storage levels, prices should continue to fall in 2015. … European gas prices set to …
Euro-zone equities have surged since the end of December, with the DAX up nearly 10%. The key driver of returns has been the anticipation and subsequent launch of the ECB’s quantitative easing programme, as well as the adverse effect that this has had on …
As oil prices have continued to fall, the prospects for economic growth and occupier demand in the Norwegian property markets have softened. However, with the krone now beginning to look cheap, growing demand from international investors will compete …
3rd February 2015
The proposed plan to exchange some of Greece’s current debts for bonds linked to the performance of the economy has some attractions. But we’re not convinced at this stage that it can make a material difference to Greece’s debt outlook. … Can GDP-linked …
The Greek banking sector is once again buckling under the weight of substantial deposit outflows and market concerns about the country’s future inside the euro-zone. There is a significant risk that this becomes self-perpetuating, forcing Greece to leave …
Whether or not Greece ultimately exits the euro, we expect the price of gold to be boosted further this year by the return of safe-haven demand as the country’s financial problems drag on. … Gold to benefit from revival of Grexit …
30th January 2015
Our concerns that the markets have been under-estimating the challenge faced by the new Syriza-led Greek Government and the Troika in trying to reach a mutually acceptable solution to Greece’s debt problems were at least partly borne out last week. Not …
January’s drop in core euro-zone inflation to a record low brought further confirmation that deflationary pressures in the currency union go well beyond the effect of falling oil and energy prices. … Euro-zone Flash CPI (Jan.) & Unemployment …
While Spain’s economy continued to grow solidly in Q4 last year, deepening deflation pressures threaten to de-rail the recovery. … Spanish GDP (Q4 …
Despite a fall in USD-denominated Moscow all-property rents of 16% in Q4, currency depreciation means that rents rose in ruble terms by 19%. That seems unsustainable. Short-term uncertainty complicates our forecasts, but a further fall in all-property …
29th January 2015
January’s drop in German HICP inflation well into negative territory highlights the strength of deflationary pressures in even the euro-zone’s strongest economies. While falls in prices should prove temporary in Germany, there are downside risks. And the …
January’s small rise in the EC Economic Sentiment Indicator (ESI) did little to change the picture of very subdued growth in the euro-zone at the start of this year. … Euro-zone EC Survey …
The latest monetary easing in Europe and Asia has revived talk of “currency wars” and fuelled concerns about the impact of dollar strength on the US economy. But much of this talk seems unduly negative. … More to cheer than fear from “currency …
December’s euro-zone monetary data showed that credit conditions continued to improve at the end of last year. But the recovery is still at an early stage, highlighting the need for the ECB’s latest policy support. … Euro-zone Monetary Indicators …
The slump in oil prices over the last six months has vindicated the bearish view we have held for several years. Our central forecast is that the price of Brent will recover to $60 per barrel by the end of this year, from around $49 today, as supply and …
28th January 2015
Expectations that Greece’s fiscal problems can be addressed by a “restructuring” of its debts overlook the fact that most of the viable adjustments have already been made. Only a substantial write-down will materially alter Greece’s debt trajectory – an …
The real impact of the ECB’s new QE programme on GDP growth and occupier demand will initially be stymied by the Greek election results and the ensuing debt re-negotiations. However, investors will be further driven from low-yielding fixed income assets …
27th January 2015
Despite concerns over Greece’s future within the euro-zone, the yields on government bonds in the rest of peripheral and southern Europe have generally remained low and close to those of Germany. This sanguine response reflects a number of factors, …
Syriza’s victory in the Greek general election may increase the influence of anti-austerity parties elsewhere in the euro-zone, most notably Podemos in Spain. But resistance from Germany seems set to limit European authorities’ ability to loosen fiscal …
While the onset of the ECB’s quantitative easing (QE) is likely to weigh on the euro in time, exchange rates are two sides of a coin, so the fate of the currency will also depend on the prospects for unconventional monetary policy outside the euro-zone. …
January’s rise in the German Ifo index suggests that fears about the effect of the Greek crisis on the German economy have so far been offset by the perceived benefits of a weaker euro and ECB quantitative easing. … German Ifo Survey …
26th January 2015
Syriza’s resounding victory in the Greek general election looks set to result in a protracted period of heightened uncertainty over Greece’s future inside the euro-zone and could threaten to reignite a broader crisis across the currency union. … Syriza …
The European Central Bank’s decision to launch a large-scale programme of government bond purchases under quantitative easing (QE) is unlikely to provide a major boost to the prices of global commodities – even gold. Developments in emerging economies are …
23rd January 2015
In this Update , we outline some of the key points to look for in this Sunday’s crucial Greek election. While much is likely to depend on coalition negotiations early next week, we suspect that the process will reveal a greater risk of Greek default and …
The ECB’s Governing Council deserves credit for meeting the demandingly high level of expectations with last week’s announcement of a quantitative easing programme worth at least €1trn. The size and open-endedness of the programme appears to have trumped …
Falling cocoa grindings in Europe, North America and Asia suggest that the world has lost some of its sweet tooth. We expect weaker demand and ample supply to push the price of cocoa lower. … Weak demand to push the price of cocoa …
The ECB’s larger-than-expected quantitative easing programme has led to a rally in Central European equities and currencies, although this hasn’t been substantial. Meanwhile, the yields on Ukrainian dollar bonds have surged further following hints from …
While the ECB’s announcement of a bolder-than-expected programme of quantitative easing (QE) has driven the spreads of troubled sovereign bonds even lower, we are sceptical that this will last given the potential fallout from Sunday’s election in Greece. …
The flash PMIs for China, the euro-zone and Japan all rose in January. Admittedly, the increases were small, but signs of stronger domestic growth in China and a stabilisation in the euro-zone economy, combined with the launch of QE by the ECB should all …
January’s small rise in the euro-zone composite PMI suggested that growth has remained very slow at the start of this year, confirming that the ECB’s latest policy support is sorely needed. … Euro-zone Flash PMIs …
The ECB’s much-anticipated quantitative easing programme appears to have met or even exceeded expectations in terms of size and shape. But we remain sceptical that it will revive the euro-zone economy or prevent an extended bout of deflation. … QE meets …
22nd January 2015
The European Central Bank’s decision to launch a large-scale programme of government bond purchases under quantitative easing (QE) is unlikely to provide a major boost to the prices of global commodities – even gold. But the impact should still be …
The programme of asset purchases announced by the European Central Bank (ECB) earlier today was larger than had been expected only a few days ago, but fears that it could fuel destabilising inflows to emerging economies seem overdone. … ECB QE and what …
It would be one of the biggest shocks in recent monetary policy history if the European Central Bank (ECB) did not announce some form of quantitative easing (QE) today. But will it live up to expectations? This note outlines the key points to look for in …
The viability of Denmark’s currency peg with the euro has been called into question following the Swiss National Bank’s decision to abandon its exchange rate ceiling. We think that the Danish peg will ultimately hold but that the Danish Nationalbank will …
21st January 2015
Global growth has slowed in recent months, but we still expect world GDP to expand by just over 3% this year and next. The slump in oil prices should have a positive impact overall, even though it will impose significant costs on net oil exporters. Lower …
The proposed plan for national central banks to implement quantitative easing for the ECB has the benefit that these banks are best-placed to design an effective policy for their own economies. But the likelihood that they will conduct the policy at their …
