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The first estimates of the Chinese and euro-zone manufacturing PMIs for April remained below 50 and are consistent with further sharp falls in the prices of industrial metals. Most worryingly, the euro-zone manufacturing PMI has fallen to its lowest level …
23rd April 2012
An analysis of real estate equity prices suggests that our strongly negative capital value growth projections for 2012 may be pessimistic. However, since equity markets have not yet fully priced in the fragmentation of the euro-zone – a scenario which is …
The recent resilience of the German economy has prompted us to become a little more upbeat regarding its prospects. But notwithstanding the continuing falls in unemployment, we suggest that talk of a consumer boom is rather far-fetched. … German …
Today’s German Ifo survey came in ahead of market expectations, although it posted only a small improvement compared with March. Predictions that the German economy will be strong enough to pull the wider euro-zone from its current difficulties could …
20th April 2012
With Nicolas Sarkozy and François Hollande set to emerge as frontrunners after the first round of the French presidential elections this Sunday, attention will turn more closely to what their policies mean for the economy. Differences in their plans are …
19th April 2012
In our view, the plunge in French commercial property investment volumes in the first quarter of 2012 highlights some fundamental weaknesses in the market. And if we are right that the French economy will slip back into recession this year, the fact that …
18th April 2012
The Swedish Riksbank’s decision to leave interest rates unchanged at 1.0% was no surprise given the recent run of encouraging economic data. But while the chances of an imminent cut have perhaps receded, we still think that the Riksbank will probably …
17th April 2012
Today’s improvement in the ZEW economic sentiment survey is consistent with resilience being shown by the German economy. But it is unclear that this optimism can be maintained given the nature of the euro-zone’s fiscal problems. … German ZEW Survey …
The fact that the Irish economy slipped back into recession in the latter half of last year lends support to our view that, taking 2012 and 2013 together, Dublin office rental values will fall by a further 10%. However, preliminary agency data, which …
16th April 2012
Hopes that the crisis in the euro-zone had been solved by Greece’s debt restructuring and the ECB’s recent liquidity injections have faded. Despite some signs of resilience in Germany, the economic outlook for the peripheral economies and even some other …
Markets last week seized on hints from the ECB that it may restart its bond purchase programme in an attempt to contain Spanish bond yields. But there are clear doubts over whether the ECB has the conviction or the ammunition to prevent yields from rising …
February’s unexpected rise in euro-zone industrial production might raise hopes that the strength of industrial occupier demand in the single currency region has improved. But we are not convinced. The narrower measure of manufacturing production revealed …
12th April 2012
German government bonds are still regarded as a safe haven, allowing them to benefit from concerns about the global economy and the rolling crisis in the periphery of the euro-zone. Some of the receipts from the ECB’s LTROs will also have been parked in …
February’s euro-zone industrial production figures were boosted by temporary factors and do not alter the bleak outlook for the overall economy. … Euro-zone Industrial Production …
To the extent that the latest sell-off in Spanish and Italian bonds prompts investors to steer clear of commercial property in either market, the resultant drop in liquidity is likely to put upwards pressure on property yields. In any event, with Italy …
11th April 2012
Argentina’s experience after the collapse of the peso ten years ago supports the view that Greece, and perhaps other peripheral economies, would ultimately be better off leaving the euro-zone rather than struggling on with the current mix of austerity, …
10th April 2012
Any lingering hopes that the European Central Bank (ECB) had either already solved the euro-zone crises or would yet come riding to the rescue with much more decisive action were surely put to bed by last week’s post-interest rate announcement press …
9th April 2012
Germany’s February industrial production figures brought further signs that the former engine of the euro-zone economic recovery has gone sharply into reverse. … German Industrial Production …
5th April 2012
The European Central Bank (ECB) hinted today that it might not be prepared to provide much more policy support and hence kept the onus firmly on governments to address the euro-zone crisis. … ECB keeps the onus on …
4th April 2012
This morning’s PMI data suggest that business activity in the euro-zone’s service sector remains subdued. And if the past relationships between employment PMIs and office rental value growth continue to hold, it looks as though the rental value recoveries …
Recent news on the euro-zone economy has dampened hopes that that the ECB’s longer-term refinancing operations (LTROs) in December and February had largely solved the euro-zone’s economic and fiscal problems. Activity surveys like the Purchasing Managers’ …
3rd April 2012
February’s fall in German retail sales volumes served as a timely reminder that the strong recovery in retail rents in the euro-zone’s largest economy cannot be taken for granted. Nevertheless, while retail rental growth should slow, the continued …
2nd April 2012
February’s rise in euro-zone unemployment confirmed that the resilience of the German labour market is doing little to drag up the average. With high inflation and fiscal tightening adding to the pressure on households’ incomes, consumer spending looks …
The reported plans to increase the size of the euro-zone bail-out fund - hopefully to be agreed at today’s (Friday’s) Eurogroup meeting - provide some encouragement that the policymakers have recognised that the Greek rescue package and the ECB’s expanded …
March’s euro-zone CPI inflation data confirmed that stubbornly high inflation is adding to the squeeze on households’ purchasing power from rising unemployment and fiscal tightening. … Euro-zone Flash CPI & German Retail Sales …
30th March 2012
Recent news from Spain suggests that the Government may be falling further behind its fiscal targets, but the other troubled euro-zone governments have made a better start to the year. … Euro-zone Fiscal Monitor …
29th March 2012
March’s EC business and consumer survey echoed other indicators in suggesting that what “recovery” there was in the euro-zone economy has already ground to a halt. … Euro-zone EC Survey …
Following the apparent success of the ECB’s recent LTROs, the Governing Council meeting on April 4th is unlikely to produce any further significant policy measures. While acknowledging the ECB’s duty to support the euro-zone’s banks, President Mario …
28th March 2012
Credit growth and lending conditions are improving gradually in the US but are still extremely weak in the euro-zone. This divergence looks likely to continue or widen in the coming months, potentially contributing to the outperformance of the US economy. …
The latest monetary data have confirmed that the ECB’s generous lending is boosting the broad money supply and perhaps even stimulating government bond purchases. But, for now at least, lending to firms and households remains stagnant at best. … Euro-zone …
Three years after entering a depression, Iceland has staged an impressive turnaround, which, on the face of it, bodes well for the peripheral euro-zone economies that have suffered from similar problems. But a key factor behind the revival has been the …
27th March 2012
March’s rise in the German Ifo Business Climate Indicator suggested that the economy remains resilient. But the increase was the smallest for some time and other business surveys paint a less upbeat picture. … German Ifo Survey …
26th March 2012
Last week brought the strongest signs yet that the post-LTRO bout of optimism is starting to wear off. Hopes that the ECB’s operations would drive a pick-up in the euro-zone economy were dealt a blow by the release of March’s flash PMI surveys, while the …
Recent macroeconomic indicators from Denmark might raise hopes that the outlook for Copenhagen retail rental values has improved significantly. But with the impact of past falls in household spending still yet to be seen in the rental data, and a strong …
22nd March 2012
The Irish GDP figures for Q4 revealed that the euro-zone’s fastest growing economy in the first half of 2011 fell back into recession in the second half. Ireland still remains in a better position than Greece and Portugal. But 2012 will be another tough …
March’s fall in the euro-zone composite PMI supports the view that the region may have fallen back into recession in Q1 and that divergences with the US are widening. … Euro-zone Flash PMIs …
Within Europe, office markets in the euro-zone’s peripheral region appear to be most at risk of oversupply over the next two years. But less obviously, office markets in Amsterdam and Budapest also look at risk of an unfavourable combination of supply and …
20th March 2012
The ECB’s latest liquidity operations appear to have averted, or at least delayed, a looming disaster in the euro-zone banking sector. But it would be wrong to think that they have solved the region’s deeper fiscal and economic problems, or secured the …
Labour market data published last week confirmed that, in contrast to their counterparts in the US, euro-zone firms continued to lay off workers at the end of last year. Timelier indicators suggest that the divergence in labour market performance has …
19th March 2012
In our view, over 2012-13, Portugal will endure the second deepest recession in the euro-zone. Even so, the gap between the Portuguese property/bond yield spread and its long-term average is by no means unusually high. Given that, and the weak rental …
16th March 2012
The Swiss National Bank pledged to maintain its extremely supportive policy stance today, keeping interest rates as close to zero as possible and defending a minimum exchange rate of CHF 1.20 per euro. But even at this level, the franc is much too high …
15th March 2012
The divergence between the performances of the US and the euro-zone economies looks set to widen even further than we had previously expected this year and next. … US economy to pull further ahead of …
14th March 2012
January’s small rise in euro-zone industrial production does little to alter the picture of a sharp slowdown in the sector. … Euro-zone Industrial Production (Jan.) & HICP …
We have revised our projections for the major Western government bond and stock markets, and for emerging markets, partly to reflect changes to our US economic forecasts and partly due to reduced fears of contagion from the further problems that we still …
The growing imbalances in the euro-zone’s TARGET2 payments system are another indication of the huge underlying problems still facing the currency union. … TARGET2 imbalances highlight euro-zone …
March’s rise in ZEW investor sentiment will add to hopes that the German economy is holding up surprisingly well as other parts of the euro-zone slide back into recession. … German ZEW Survey …
13th March 2012
The markets may currently be giving Italy the benefit of the doubt, but recent data have supported our gloomy view of the economic outlook. We think it may only be a matter of time before Italy is dragged back into the region’s debt crisis. … Italy …
12th March 2012
On the face of it, recent developments like the Greek debt restructuring deal and the ECB’s liquidity operations appear to have strongly undermined our view that a limited form of euro-zone break-up will commence this calendar year, most probably with the …
