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A weak economic outlook for the euro-zone means that we do not expect particularly strong rental growth in the coming years. But, with interest rates on hold and bond yields expected to stay low, prime property in the region will see further yield falls …
27th November 2014
An ECB quantitative easing (QE) programme will probably not be decisive enough to prompt a rise in inflation expectations like that which lifted US Treasury yields during the Fed’s bouts of QE. Accordingly, core euro-zone bond yields are likely to stay …
26th November 2014
While we are still not convinced that the euro-zone is the new Japan, despite the many similarities in their economic predicaments, we are increasingly of the view that the 10-year Bund yield will remain exceptionally low for at least the next couple of …
25th November 2014
The Greek Government does not appear to have been too rattled by last month’s market turmoil, sticking to its budget plan despite opposition from the Troika. But it may come under pressure to seek faster repayment of outstanding taxes, threatening the …
The second release of Q3 German GDP confirmed that the economy expanded by a meagre 0.1%. The breakdown offered some hope, with consumer spending and exports rising strongly, but surveys suggest that the recovery will be slow at best. … German GDP (Q3) …
November’s rise in the German Ifo survey is a relief after the fall in the PMI and leaves the key surveys painting a somewhat mixed picture. But both point to slow growth at best, which will do little to revive the euro-zone as a whole. … German Ifo …
24th November 2014
The objections of German Bundesbank President Jens Weidmann to the prospect of an ECB quantitative easing programme including government bond purchases are unlikely to prevent such a programme being implemented in the next few months. But along with the …
21st November 2014
EC President Jean-Claude Juncker’s proposal for a €300bn EU investment programme will probably do little more than shift existing funds around the economy with little or no positive impact on growth. … Juncker’s investment plan is unlikely to amount to …
Italy’s weak economic outlook suggests that occupier demand in Milan will continue to be driven by companies seeking to consolidate space. As such, over the coming quarters the vacancy rate will probably rise further. That leaves little potential for …
20th November 2014
Norway has been one of the strongest growing economies of the developed world over the last decade. But with households buckling under high debt burdens and lower oil prices set to exacerbate the decline of the energy sector, a weaker growth path lies …
The renewed slowdown in the growth of Portuguese exports in recent quarters has underlined the need for the country to implement further decisive reforms in order to lift growth from the anaemic rates seen over the last decade. … Weaker Portuguese …
Falls in the flash PMIs for China and the euro-zone do not bode well for commodity prices. Activity indicators were weak in both regions, suggesting downward pressure on the prices of industrial metals, particularly copper, for the remainder of this year. …
Q3’s reasonably solid gain in GDP maintained Norway’s position as the strongest of the Nordic economies. But signs of weaker household spending and the likely negative effects of lower oil prices point to slower growth ahead. … Norwegian GDP …
November’s fall in the euro-zone composite PMI was a serious blow to hopes that the recovery would resume towards the end of the year. … Euro-zone Flash PMIs …
Q3’s reasonably solid gain in GDP maintained Norway’s position as the strongest of the Nordic economies. But signs of weaker household spending and the likely negative effects of lower oil prices point to slower growth ahead. … Norwegian GDP (Q3 …
Hopes that the European Central Bank (ECB) will include gold on the list of assets to be purchased as part of a programme of full-blown quantitative easing (QE) will almost certainly be disappointed. There is a better chance, albeit still slim, that the …
19th November 2014
Office rental values in Vienna have ticked up over 2014 despite weak take-up. That seems to be down to the low availability of modern office space, as companies seek efficiency savings in light of the subdued economic growth outlook. Equally, however, a …
An effective ECB QE programme would probably involve large-scale purchases of higher-yielding and long-term debt, including both government bonds and private sector assets. But we suspect that the Bank will stick to limited purchases of short-dated bonds, …
Although the Fed recently concluded its quantitative easing (QE), the Bank of Japan has announced an expansion in the pace of its own asset purchases and the ECB is edging closer to full-blown QE. We don't expect these new QE programmes to have much of an …
18th November 2014
The recent drop in oil prices looks set to tip euro-zone CPI inflation into negative territory over the coming months, increasing the risk of a prolonged and damaging bout of deflation. … Falling oil prices to tip the euro-zone into …
If and when the ECB implements “full-blown QE”, there may be some positive spillovers for the rest of the world, but they would not be large. Countries elsewhere in Europe would benefit most from stronger euro-zone growth, but this may be offset by upward …
The improvement in Dutch consumer confidence and upturn in the housing market suggest that the near stagnation of consumer spending in Q3 need not be a sign of things to come. But continued fiscal austerity and the high level of household debt will ensure …
November’s rise in German ZEW investor sentiment came as a modest relief after the recent gloomy news on the euro-zone. But the index has not been very reliable in the past and it remains consistent with only a slow resumption of the German recovery. … …
While it is welcome news that the Greek economy has finally started growing again after seven years of recession, the recent GDP figures have not solved two of its, arguably biggest, problems: its huge debt burden and ongoing uncertainty about how it will …
17th November 2014
The widening of the euro-zone trade surplus to a new record in September was an encouraging sign that exporters are starting to benefit from the weaker euro. But the ECB will need to deliver on hints of quantitative easing if this boost is to be …
One notable element of last week’s euro-zone GDP figures for the third quarter was the strength of the peripheral economies, even Greece, in relation to the core. This might be seen as confirmation that the five year long euro-zone crisis, which …
14th November 2014
The small expansion in the euro-zone economy in Q3 has not diminished the need for both the European Central Bank (ECB) and national governments to respond to the persistent risk of deflation in the currency union with more decisive policy action. … …
Economic indicators generally pointed to slower growth across both Western European and Emerging European economies in Q3. That helps to explain why occupier market data were soft, with rents unchanged in most cities. Yield changes were more numerous, and …
Q3’s near stagnation of the German economy confirmed that economic weakness has spread to the core of the single currency area. While France performed marginally better, it seems that the euro-zone barely returned to growth after Q2’s stagnation. … …
The decline in Russia’s macroeconomic outlook suggests that Moscow occupier demand will fall further. With an influx of new supply also undermining rental values, and property yields set to come under pressure from rising interest rates, the outlook for …
13th November 2014
Markets have probably at least partially priced in the prospect of QE in the euro-zone, suggesting that the ECB will have to unveil a bold programme to prompt a further significant market reaction. … Is QE already priced …
12th November 2014
September’s euro-zone industrial production figures confirmed that industry acted as a drag on the currency union’s economy in Q3 and pose downside risks to Friday’s euro-zone GDP figures. … Euro-zone Industrial Production …
The rise in Sweden’s headline inflation rate in October will do little to dispel fears that the country is succumbing to a damaging bout of deflation and will maintain pressure on the Riksbank to consider unconventional monetary policy measures. … …
11th November 2014
The rise in Sweden’s headline inflation rate in October will do little to dispel fears that the country is succumbing to a damaging bout of deflation and will maintain pressure on the Riksbank to consider unconventional monetary policy measures. … Swedish …
Any optimism surrounding the ECB’s progress towards QE has been dulled by concerns that the already low level of yields on many assets will make the policy ineffective. But there is still scope for QE to bring down interest rates as well as having …
10th November 2014
The ECB suggested last week that preparations are finally underway to launch full-blown quantitative easing. It seems that action will be triggered by either of two factors: evidence that existing policies will not achieve the desired €1trn balance sheet …
7th November 2014
There are a number of reasons to think that the German office occupier market is stronger than third quarter take-up data suggest. And, with vacancy rates low and the majority of upcoming developments already pre-let, the outlook for rental values remains …
September’s disappointing rebound in German industrial production increased the risks that both the German and euro-zone economies contracted in Q3 and added to the pressure on the ECB and German Government to provide more policy support. … German & …
Today’s statement from Mr Draghi that ECB staff are preparing further monetary policy measures provided the firmest support yet for our long-held view that the Bank will implement full-blown quantitative easing. It is now a matter of when rather than …
6th November 2014
The fall of the Berlin Wall marked the start of the transition from central planning to market-based economies in Central and Eastern Europe, which in turn paved the way for a sharp rise in prosperity. But 25 years on, concerns are rising that income …
Economic indicators point to a slowing of the euro-zone economic recovery, particularly in the core economies. Nevertheless, the search for property investment opportunities has carried on unabated, with total euro-zone investment reaching its highest …
The latest data have shown tentative signs of improvement in the euro-zone banking sector, with the pace of contraction in lending slowing slightly in September (see Chart) and the Bank Lending Survey pointing to a further loosening of credit conditions. …
5th November 2014
Iceland’s central bank unexpectedly cut its main interest rate to 5.75% today, the first change in two years, as it lowered its inflation and growth forecasts. But we think it may have to reverse course next year as strong domestic demand and labour …
October’s final composite PMI was slightly below the flash estimate and indicated that the euro-zone economy may have started Q4 on a weak note. … Euro-zone Retail Sales (Sep.) & Final PMIs …
The S&P 500 has recovered from a major wobble in October and recently posted another record high. That being said, we don’t think the strong performance is likely to last. The value of the US stock market will probably grow more slowly than the economy in …
4th November 2014
While the extension of the Bank of Japan’s quantitative easing programme may not deliver a sharp upturn in the Japanese economy, the signal it has sent regarding the future stance of Japanese monetary policy and the corresponding impact on the yen provide …
The Greek Government appears to have backtracked from plans of a “clean exit” from its EU bail-out programme in December, but it might still be over-estimating the extent to which it can finance itself in the markets and not rely on external support. … …
Fears that a referendum over the Swiss National Bank’s (SNB’s) gold holdings might prevent the Bank defending its ceiling for the Swiss franc may be overblown. But the referendum highlights political opposition to the SNB’s aggressive balance sheet …
