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Despite the sharp rise in production in August, the German industrial sector will provide the wider economy with a slightly smaller boost in Q3 than Q2. … German Industrial Production …
9th October 2013
The European economy has shown further signs of recovery, with the euro-zone finally emerging from recession in the second quarter and other parts of the continent also faring better. But growth in the peripheral countries of the currency union looks set …
8th October 2013
The factors which have supported the sharp narrowing of the spread between Spanish and German government bond yields over the past year or so should also be supportive of Spanish property values. However, near-term constraints on economic growth mean that …
Evidence mounted last week that euro-zone unemployment has peaked. Particularly encouragingly, many of the peripheral economies have now enjoyed several months of falling unemployment. What’s more, employment growth in the region is likely to pick up over …
7th October 2013
The spreads between non-prime and prime yields in some of Europe’s core property investment markets have widened over the past few years. But without stronger evidence of a sustainable economic recovery in Continental Europe, there is not yet much scope …
3rd October 2013
President Draghi struck a cautiously optimistic tone about the euro-zone’s nascent recovery. But while he made it clear that the ECB stands ready to prevent excessive rises in market interest rates, there was little sign that further imminent action to …
2nd October 2013
The fall in euro-zone CPI inflation to 1.1% in September – its lowest rate since February 2010 – leaves it well below the ECB’s target of “below, but close to, 2%”. While falling energy inflation has played an important role, core inflation has also …
A contentious component of the Greek bail-out package has been its privatisation programme. This Update summarises some of the views expressed at a panel discussion in which Ben May was involved at the Euromoney “Greece Privatisation and Investment Forum” …
1st October 2013
August’s euro-zone unemployment figures provided further tentative signs that labour market conditions are improving. … Euro-zone Unemployment (Aug. 13) & Final Manu. PMI …
Silvio Berlusconi’s decision to withdraw his support for the coalition Government may not trigger elections. But the fragile political situation highlights the huge challenges that Italy faces just to make further inroads into its budget deficit, let …
30th September 2013
September’s euro-zone flash CPI figures confirmed that the ECB enjoys plenty of room to loosen monetary policy further. … Euro-zone Flash CPI …
Over the next 5-10 years, we think that capital values in the European logistics sector will be strongest in Hungary, Ireland and the UK, but also above average in Russia and Germany. … Logistics: where are the …
Last week’s surprise (to most people) decision by the US Federal Reserve not to “taper” its asset purchases has some near-term benefits for the euro-zone. But it does not eliminate the longer-term challenges facing the European Central Bank. … Surveys …
September’s European Commission business and consumer survey echoed the message from other recent indicators that the euro-zone economy probably expanded again in Q3. But growth is too slow to resolve the region’s debt crisis. … Euro-zone EC Survey …
27th September 2013
With Germany unlikely to alter its hardline approach towards the euro-zone’s more troubled governments following last weekend’s federal election, we doubt that the credit spreads of peripheral euro-zone bonds will contract much further. … Narrowing in …
26th September 2013
The continued weakness of the euro-zone monetary data in August suggests that the pick-up in the real economy rests on fragile foundations. … Euro-zone Monetary Indicators Monitor …
The resilience of Dutch commercial property markets to very weak economic fundamentals over the past few years may finally be fading. Previous supports such as the solid labour market and an increased use of rental incentives are now unwinding. Capital …
The firmer tone of the economic data has ruled out any change in interest rates at the ECB Governing Council meeting on 2nd October, while the US Federal Reserve’s recent communication problems will have strengthened the ECB’s resolve to keep its own …
25th September 2013
Greece and Ireland have continued to cut their budget deficits. But the fragile political situation in Italy has contributed to some budget slippage there. … Euro-zone Fiscal Monitor …
The execution of more long-term refinancing operations (LTROs) by the ECB could ease concerns over a potential liquidity crisis in the banking sector. But it could also further strengthen the pernicious links between euro-zone governments and banks. … …
24th September 2013
September’s rise in German Ifo business sentiment confirmed that the economy is recovering, but we continue to expect GDP growth to be reasonably sluggish over the coming quarters. … German Ifo Survey …
Last week’s data, which confirmed that the economy took another step forward in the second quarter, was welcome news for Irish property markets. But there was little sign of any material strengthening in the domestic economy. That suggests that the …
23rd September 2013
While Angela Merkel did not win enough votes to govern alone in yesterday’s election, her strong support was a clear vindication of her domestic and international policy stance so far. She is likely to end up governing as part of a grand coalition with …
September’s rise in the euro-zone’s composite PMI suggests that the bloc’s recovery continued in Q3. But there are still good reasons to worry about the economic outlook. … Euro-zone Flash PMIs …
Last week’s surprise (to most people) decision by the US Federal Reserve not to “taper” its asset purchases has some near-term benefits for the euro-zone. But it does not eliminate the longer-term challenges facing the European Central Bank. … Fed …
The Dutch labour market – once the envy of the euro-zone – will continue to shed jobs over the coming year. And as firms attempt to recover previous sharp falls in productivity, employment growth is likely to remain weak even once the economy starts …
20th September 2013
Changes to the legislation governing German Open-Ended Funds (GOEFs) this year seem to have been well received. The overall value of the sector has stabilised and new fund launches are being planned. Yet the legacy of the crisis is not over and we remain …
19th September 2013
Despite the improvement in financial market conditions, continued recovery of the Swiss economy and softening of the franc, the Swiss National Bank (SNB) re-emphasised today that it intends to maintain its very supportive policy stance for the foreseeable …
Although the recent rise in inflation prompted the Norges Bank to bring forward its projected hiking cycle, we think that a slowdown in the economy will prevent the Bank hiking before the end of 2014. … Norges Bank unlikely to hike before …
Although the recent rise in inflation prompted the Norges Bank to bring forward its projected hikingcycle, we think that a slowdown in the economy will prevent the Bank hiking before the end of 2014. … Norges Bank unlikely to hike before …
Strong investor flows into European equities since the start of the year have partly been driven by a perception that valuations are favourable. But while the headline metrics suggest that European equities still appear undervalued from a historical …
18th September 2013
We don’t expect the announcement of Fed tapering to have an immediately adverse effect on the euro-zone’s financial markets and economy. But a new phase in which other central banks are starting to scale back policy support could test the ECB’s resolve to …
September’s MPC minutes suggest that, despite the arguably disappointing impact of forward guidance, the Committee is happy with its policy stance. A resumption of quantitative easing (QE) before the end of the year now looks less likely, although we …
17th September 2013
Given the progress that the Portuguese Government has made towards cutting its borrowing, the Troika is likely to grant it at least part of its next bail-out tranche after negotiations this week. But with bond yields set to remain under upward pressure, a …
Recent developments in Greece’s tourism sector suggest that the economy might record another quarterly rise in GDP in Q3. But even if this is the case, we suspect that this will not mark the start of a sustained economic recovery. … Will tourism …
German investor sentiment strengthened in September, suggesting that the economic recovery should continue, albeit at a slower pace than in Q2. But the fall in euro-zone export values in July suggests the external sector is unlikely to provide much fuel …
While the CSU, sister party to Angela Merkel’s CDU, won a clear victory in Bavaria yesterday, the poor showing for the FDP bodes ill for the current coalition at a national level. The chance of Mrs Merkel having to form a grand coalition with the SPD …
16th September 2013
Q2’s labour cost data revealed that cost growth in the euro-zone core slowed relative to that in the periphery, undermining hopes of a swift rebalancing within the bloc. … Euro-zone Labour Costs (Q2) & Final CPI …
Spain has begun to resolve some of its deep economic problems and its recession has eased. But the strong recovery needed to lower unemployment dramatically and ensure that public sector debt does not climb significantly higher is still a long way off. …
July’s French industrial production data were a blow to hopes that the economy is staging a longawaited recovery. With business surveys at low levels, consumer confidence weak, unemployment rising and house prices falling, we were not surprised to see the …
Q2’s employment data suggest that the downturn in the euro-zone labour market is coming to an end. But a significant upturn remains a distant prospect. … Euro-zone Employment …
13th September 2013
Denmark’s year-long experiment with negative deposit rates is likely to come to an end next year. But we think that markets are wrong to expect a second rate hike before the end of 2014. … When will Denmark normalise monetary …
Denmark’s year-long experiment with negative deposit rates is likely to come to an end next year. Butwe think that markets are wrong to expect a second rate hike before the end of 2014. … When will Denmark normalise monetary …
Hopes that looser or less tight fiscal policy will fuel the recovery in the euro-zone economy are unlikely to be met. For the foreseeable future, fiscal policy will remain a sizeable drag on growth. … Fiscal policy won’t fuel the euro-zone …
12th September 2013
July’s large fall in euro-zone industrial production put a serious dent in hopes that the tentative recovery underway in the region’s economy will have gathered further momentum in the current quarter. … Euro-zone Industrial Production …
Although Q2’s final Italian GDP figures painted a reasonably encouraging picture, timelier hard data, such as the French industrial production numbers for July, suggest that the euro-zone economy remains fragile and that the recovery will be weak. … …
10th September 2013
The possible coalition of Germany’s SPD, Green and Left parties after next week’s election would probably mean slightly higher taxes and spending than under the more likely alternatives of a grand coalition or a repeat of the current centre-right …
9th September 2013
The quarterly rise in Greek GDP in Q2 raises hopes that the economy has reached a turning point. But we doubt that Greece is now on the path to recovery and still think that further financial assistance and another debt restructuring will be needed to …
Germany will probably continue to provide temporary support for troubled euro-zone countries but retain an emphasis on austerity after its election later this month. This should minimise the demand for safe havens, such as German Bunds, from a renewed …
