Filtered by Region: Europe Use setting Europe
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 …
4th November 2014
All peripheral economies narrowed their budget deficits in September but France and Italy submitted draft budgets that flouted EU fiscal rules. … Euro-zone Fiscal Monitor …
3rd November 2014
If recent history is any guide, Fed tightening is unlikely to derail stock markets to the extent that many fear. Our view is that while US equities will struggle to make further headway, they will largely shrug off more restrictive monetary policy at …
31st October 2014
The Italian Prime Minister’s package of labour market reforms is a step in the right direction, but reform efforts are moving too slowly to ensure a meaningful reduction in unemployment or improvement in the broader economic outlook in the foreseeable …
Last week’s bank stress test results, September’s lending data and the ECB’s latest Bank Lending Survey all suggested that conditions in the euro-zone’s banking sector are, on the whole, improving gradually. However, the weakness in Italy and a slowdown …
With euro-zone HICP inflation still close to zero in October and the unemployment rate holding near a record high, there remains a significant risk of deflation in the single currency area. … Euro-zone Flash CPI (Oct.) & Unemployment …
The ECB seems unlikely to announce any new policies this month as it continues to purchase small quantities of covered bonds and prepares to buy asset-backed securities. With the risk of deflation growing, President Mario Draghi may confirm speculation …
30th October 2014
October’s EC Business and Consumer Survey suggests that the euro-zone economy got off to a weak start in Q4, after broadly stagnating in Q3. … Euro-zone EC Survey …
The likely end of the Fed’s asset purchases under QE3 does little to change the bigger picture that global monetary conditions remain very loose. … Monetary conditions set to remain …
29th October 2014
Despite only tepid economic growth in Belgium, strengthening occupier demand has caused industrial vacancy rates to fall. With vacancy at frictional levels, prime rental value growth will soon widen to the Brussels market, further supporting positive real …
The ECB’s October Bank Lending Survey (BLS) provided further evidence of a slow improvement in euro-zone credit conditions. But lending standards are still tight and the faltering economic recovery may discourage banks from easing them further. … ECB …
A low volume of “bad asset” sales helps to explain why Italy’s investment growth has lagged behind other countries. Yet the recent bank stress tests, combined with changes to the Italian REIT structure, should be the catalyst required to kick-start this …
28th October 2014
Sweden’s central bank today stepped up its fight against deflation, cutting its main policy rate to a record low of 0% and pushing back the date at which it first expects to raise rates. We think that the Riksbank may well need to resort to currency …
On the whole, the results of Europe’s bank stress tests were positive, implying that the heavy drag that falls in bank lending have exerted on the euro-zone economy may be set to ease. But poor results for Italy suggest that further falls in bank lending …
27th October 2014
September’s euro-zone monetary data showed further signs of improvement but with lending growth still negative and, given the need for some of the weakest banks to raise further capital, the sector is likely to remain a drag on the recovery. … Euro-zone …
October’s fall in Ifo business sentiment was a blow to hopes that the German recovery should resume at the end of the year and will add to pressure on the Government there to consider a fiscal boost. … German Ifo Survey …
The Comprehensive Assessment of the euro-zone’s banks published on Sunday should go some way towards restoring sentiment in the banking sector. After all, the adverse economic scenarios to which the banks have been subjected are fairly extreme. But the …
24th October 2014
The past month has brought further evidence of weaker growth in Central Europe. Admittedly, August’s particularly disappointing data appear to have been distorted by variations in summer holidays. And the early data we have for September suggest that …
The surprisingly sharp slowdown in the euro-zone economy over recent months may be partly the result of temporary negative factors such as the Ukraine crisis. But the underlying picture is still one of a very fragile recovery and continued risks of …
23rd October 2014
While China’s headline flash PMI rose in October, falls in the activity and new orders components do not bode well for commodities prices. Meanwhile, the euro-zone’s flash PMI suggests the region continues to teeter on the brink of recession. … PMIs …
October’s modest rise in the euro-zone composite PMI left it still dangerously close to the no change level of 50. With hard data pointing to a possible fall in GDP in Q3, the region may still have entered its third recession in six years. … Euro-zone …
Compared to previous bouts of risk aversion, the peripheral euro-zone and emerging European economic outlook is better. And, with investors now seeing the sector as a core portfolio component, the risks to logistics property pricing outside of the core …
22nd October 2014
The average yield spread of 10-year Italian and Spanish sovereign bonds over German Bunds has surged by almost 20 basis points over the past month. We suspect that it may rise further. One reason for this is that the spread remains lower than that of …
Rumours that the ECB is considering corporate bond purchases suggest that the Bank is edging further into the realms of quantitative easing. But we think that it will need to buy sovereign bonds as well to ensure a meaningful expansion of its balance …
21st October 2014
The euro-zone’s latest bank stress tests may be more credible than previous versions and hence do more to restore confidence in the region’s banking sector. But the corrective measures required in response could continue to constrain bank lending in the …
The current rise in risk aversion may dent the growth in property investment volumes in H1 2015 as demand for secondary assets wanes. However, with bund yields remaining low, prime property demand and indeed, pricing, will not be negatively impacted in …
The improvement in southern euro-zone nations’ competitiveness has left some core countries, such as Belgium, lagging behind. If Belgium and other uncompetitive economies are unable to close the growing cost gap with the rest of the euro-zone, they risk …
20th October 2014
The recent drop in oil prices is widely assumed to have strengthened the case for monetary policy remaining looser for longer. However, while we think it may encourage the ECB to loosen monetary policy further, it should make much less difference for the …
17th October 2014
Last week’s rise in peripheral euro-zone bond yields mainly reflected contagion effects from Greece’s sell-off, rather than general fiscal concerns. Indeed, draft 2015 budgets showed most countries planning to meet their deficit targets this year. …
While there are some comforting distinctions between the recent jump in Greek bond yields and that which triggered the euro-zone crisis back in 2010, the scale of the economic challenges still facing the peripheral countries suggests that further …
While the recent weakness of financial markets appears hard to square with the economic outlook insome parts of the world like the US, in the euro-zone the markets’ concerns appear more justified. … In the euro-zone at least, the markets have got it …
16th October 2014
The widening of the euro-zone trade surplus in August reflected a drop in importsrelated to weak domestic demand rather than a rise in exports. It still looks like theeconomy failed to grow in Q3 and exports will probably recover only slowly thereafter. … …
Global growth is likely to accelerate slightly next year but to remain well below its pre-crisis average. Strong recoveries in the US and UK will be offset by near-stagnation in the eurozone and Japan. Lower commodity prices should drag headline inflation …
15th October 2014
With oil prices having fallen and costs continuing to rise, firms in the sector have cut back their investment plans. Whilst this will reduce economic growth more broadly, we expect the greatest impact on property to be in the office sector, where upwards …
The French Government’s submission today of a budget that flouts the European Commission’s fiscal rules will be a key test of EU authorities’ resolve. We expect a compromise to be reached that forces slightly more austerity onto France but also hastens …
In contrast to most core euro-zone markets, industrial yields across the periphery have yet to narrow to the same extent as office and retail yields. Hence, while the recent weak euro-zone production data increases the risk that occupier market recoveries …
14th October 2014
The adverse market reaction to the Greek Government’s plans to exit its IMF bail-out early has underlined the fragility of market sentiment towards the country and presumably made it very unlikely that Greece will be able to carry through its plans. … …
Although the spread between the yields of 10-year US Treasuries and German Bunds is already close to its largest since the start of European Monetary Union, we see little reason why it should not continue to grow by another percentage point or so given …
August’s fall in euro-zone industrial production and the sharp drop in German ZEW investor sentiment in October add to the risk that the single currency area may be entering its third recession in six years. … Euro-zone Industrial Production (Aug.) & …
It would be unusual for inflation pressures to be building in some advanced economies and falling in others. Nonetheless, this is exactly what we expect to happen in the next year or two, as US inflation picks up while the euro-zone teeters on the brink …
13th October 2014
Concerns that the euro-zone’s faltering recovery will drag the UK’s own into the doldrums appear somewhat overblown. Past experience shows that the UK economy has been able to outperform the euro-zone’s for prolonged periods, and we think that it will …
The European economic recovery has weakened, with the euro-zone now at risk of recession and countries outside the region feeling the effects on their exports. While the euro-zone’s peripheral countries are making some encouraging fiscal and economic …
Recent renewed calls for the German Government to take advantage of its fiscal room for manoeuvre in order to stimulate its economy have centred on the potentially beneficial effects on its weaker neighbours’ exports. But last week’s German industrial …
10th October 2014
Despite a weak outlook for the occupier markets, we expect Swiss prime office yields to mark time at their current levels for at least another 12 to 18 months as bond yields stay close to historic lows and investment activity from local pension funds …
9th October 2014
Gradually improving economic growth and tightening supply in prime locations is set to produce rental growth in the next 12 months. With industrial yields elevated relative to both office yields and risk-free rates, the prospects for this sector make …
8th October 2014
August’s big drop in industrial production all but confirmed that German industry is back in recession and underlined the need for both the ECB and the German Government to give the euro-zone’s biggest economy much more policy support. … German …
7th October 2014
Don’t be fooled by the apparent normalisation of the euro-zone’s financial markets. Conditions in the currency union’s economy are still a very long way from normal. … Will the euro-zone ever escape …
6th October 2014
The ECB confirmed last week that it will start to buy assets outright later this month and that the purchases will not be sterilised. But technically, this probably still amounts to credit easing rather than quantitative easing. And the big picture is …
3rd October 2014
August’s increase in euro-zone retail sales provided a positive sign for consumer spending. But with September’s PMIs revised down in the final estimates, there is more evidence that the euro-zone economy as a whole struggled in Q3. … Euro-zone Retail …
