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The covid numbers have continued to move in the right direction in the euro-zone, while the vaccine rollout has continued to gain pace, with around a third of the population receiving at least one dose. That has reassured governments that they can push …
21st May 2021
Please entertain me, Statistics Denmark Statistics Denmark’s website is always a good place to start if you’re looking for some off-the-wall statistics to liven up an otherwise data-light week, and this week was no exception: we learned that the average …
Rising yields present a challenge to policymakers The account of April’s ECB meeting, published on Friday, gave little away. It reiterated that the Governing Council was not concerned by the increase in bond yields, and that the pace of asset purchases …
14th May 2021
Economic analysis at the cutting edge Given that the Riksbank left its policy settings on hold in April, the minutes from the meeting (which were released this week) were never going to be a rip snorter. That said, we were keen to pore over them for clues …
The latest news on the euro-zone economy has been encouraging. As we reported earlier today industrial production in Germany, France and Spain in March was nothing to write home about, as shortages of inputs including semiconductors left factories unable …
7th May 2021
What’s Swedish for “gangbusters”? Preliminary GDP data released last week indicated that Swedish output had already surpassed its pre-virus level in March – faster than it takes many to assemble IKEA furniture. In the meantime, the strong set of activity …
GDP data published this morning confirmed that the euro-zone economy contracted slightly in Q1, even though the business and consumer surveys painted an improving picture. Those same surveys suggest that sentiment and activity improved again in April. The …
30th April 2021
Riksbank and Fed singing off similar hymn sheets As expected, the Riksbank left its repo rate and other policy settings unchanged on Tuesday. (See here .) However, the chunky upward revisions to its near-term GDP forecast were swiftly vindicated by the …
Below, but close to, a significant PEPP increase There were no real surprises at this week’s ECB meeting (see here ), but the Governing Council will have some decisions to make at the meeting in June. The first will be what to do with its economic …
23rd April 2021
EC offering carrots, following failure of the stick The long-running saga over a new bilateral “framework agreement” between Switzerland and the EU is back in the news, with the current Swiss President, Guy Parmelin, set to meet his European Commission …
News that distribution of the Johnson and Johnson (J&J) vaccine is being paused due to evidence that it causes extremely rare but serious blood clots came as another blow to the region’s vaccination efforts this week. As we noted here , the EU was …
16th April 2021
Public health officials calling the shots This week’s decision by Denmark to discontinue usage of the AstraZeneca vaccine understandably took the headlines. (Incidentally, note that the jab is now officially known as ‘Vaxzevria’, which could be a …
The IMF gives Switzerland tops marks for effort The IMF completed its latest Article IV consultation with Switzerland this week. The concluding statements of such missions are typically rather anodyne but this one included some linguistic flourishes. For …
9th April 2021
The final release of the euro-zone PMIs for March this week showed that the Composite index for the region was even stronger than previously estimated and that the increase was broad-based. This rounded off a strong run of business and consumer surveys …
Swiss manufacturers are too busy for pranks The spaghetti-tree hoax of 1957, which purportedly showed a Swiss family harvesting spaghetti from a tree, is widely regarded as one of the most successful April Fools’ pranks and (perhaps unfairly) exposed the …
1st April 2021
Lockdowns blues Anyone glancing at the latest business surveys would get the impression that the euro-zone economy is booming. The EC Economic Sentiment Indicator, published earlier this week, echoed the message from the PMIs, and shows activity …
Denmark plots a course to re-opening Sweden announced this week that it will allow vaccinations using the AstraZeneca jab to resume, albeit only for the over-65s, but both Norway and Denmark kept the temporary suspensions in place. It has not all been …
26th March 2021
Economy to tread water in H1 The PMI data for March released this week were better than expected, with the headline euro-zone index rising above 50 for the first time in six months. What’s more, not only did the PMIs and German Ifo surveys suggest that …
Norges Bank’s Intentions (4,4): RATE HIKE The Norges Bank’s decision to leave its policy rate on hold at zero this week was never really in doubt. However, as we expected, policymakers shifted to a more hawkish stance and prepared the ground for the start …
19th March 2021
While the ECB promised last week that it would make “significantly higher” bond purchases over the coming quarter, there has been little evidence so far that the weekly pace of purchases has accelerated. The latest data showed that the ECB made net …
After weeks of indecision the ECB pledged yesterday to make “significantly higher” bond purchases in the coming quarter. (See here .) As weekly purchases since New Year have averaged €14bn, anything less than €20bn would, in our view, not be …
12th March 2021
Oh no, not more ECB QE! The SNB would have been forgiven for being a bit perturbed by the dovish message from the ECB yesterday that it expects the pace of its asset purchases to be “significantly higher” in the coming quarter. After all, the prospect of …
Swiss franc seems set to fall further Swiss inflation came in below expectations in February (see here ), but the period of deflation is likely to end soon. As elsewhere, the latest manufacturing PMI pointed to rising price pressures from disruption and …
5th March 2021
This week, pressure on bond yields, inflation and national health services continued to build. Daily Covid-19 infections are rising again in Italy and France, and the number of people in intensive care with Covid is increasing in both countries. (See here …
Not immune to the bond market rout As elsewhere, the sell-off in the bond market hit the headlines in Switzerland and the Nordics this week. In keeping with the trend over the past year or so, the Norwegian 10-year yield has tracked that in the US higher, …
26th February 2021
ECB tries to quash bond yield increases Euro-zone sovereign bond yields continued to rise this week in line with those elsewhere, as investors reassess the global inflation outlook and related prospects for monetary policy. While inflation has risen in …
Borrowing costs on the rise Sovereign bond yields throughout the euro-zone rose sharply this week, raising questions about the outlook for growth and inflation. Ten-year German and Italian bond yields, for example, rose by 15bp and 20bp respectively. …
19th February 2021
Norges Bank set to blink first In case you missed it, we changed our view on the Norges Bank this week. Having previously forecast the key interest rate to remain on hold into 2023, we now expect the Bank to be the first advanced central bank to begin …
Attention shifts from repo rate to asset purchases As expected, the Riksbank left its repo rate and other policy settings unchanged on Wednesday morning. (See here .) The Bank was justifiably upbeat about near-term prospects for the economy given the …
12th February 2021
New government in Italy The decision by the Five Star Movement to support Mario Draghi means that the coalition will have a huge majority and that no single party could collapse the government by pulling out. This should also make it easier to approve …
Sequels all too often end up disappointing, so Mario Draghi will be hoping that his return to the euro-zone’s centre stage little more than a year after he stepped down as ECB President proves the exception to the rule. But if “saving the euro-zone” was a …
5th February 2021
Swedish economy proving resilient Data released this week have provided welcome signs that the Swedish economy is holding up better than we feared. The manufacturing sector remains in rude health, helped by a pick-up in global trade flows. While the …
No sooner had we put the final touches to our quarterly Outlook than some of the downside risks to our forecasts have begun to materialise. Our prediction of a brisk recovery in GDP beginning in the second quarter was based on two assumptions: (i) that …
29th January 2021
Swiss recovery shifts into reverse The plunge in the Swiss KOF Economic Barometer in January, from 104.1 in December to 96.5 (well below even our below-consensus forecast), suggests that the reintroduction of a nationwide lockdown is starting to bite, and …
It is not surprising that investors interpreted the ECB press conference this week as being slightly hawkish. After all, policymakers seem content with preserving the current level of financial conditions, despite their forecasts suggesting that this will …
22nd January 2021
Sweden extends (but doesn’t tighten) restrictions Although the number of new daily infections in Sweden has come down over the past week, it remains high by Nordic standards. It is therefore no surprise that the Swedish government announced a two-week …
In contrast to the relentlessly grim epidemiological numbers, the economic data for the euro-zone published this week have been fairly positive. The 2.5% m/m increase in euro-zone industrial production in November points to output rising in Q4, helping to …
15th January 2021
A strong Q4 & a tough Q1 This week’s data from Sweden and Norway add to the signs that both economies ended Q4 on a decent note and outperformed even the best-performing major euro-zone economies in 2020. Mainland GDP in Norway contracted by less than …
Q4 not as bad as first feared… The manufacturing PMIs from December (released on Monday morning), suggest that the industrial sectors in Switzerland and Sweden ended 2020 on a high, helped by robust demand from Asia. (See here .) The Swiss PMI rose to a …
8th January 2021
The number of new coronavirus cases came down in many countries before Christmas as a result of the tighter restrictions in place. But since then, things have taken a turn for the worse. New cases have been increasing at the beginning of the year in …
US Treasury not on the SNB’s Christmas card list The SNB’s final policy meeting of the year (see here ) was overshadowed by the news on Wednesday that the US Treasury designated Switzerland, along with Vietnam, a “currency manipulator” in its latest …
18th December 2020
With this being our final Weekly of 2020, it seems like a good opportunity to cast an eye back over this year, and draw some lessons for next year too. Lesson 1: acknowledge the uncertainty We aren’t going to be too harsh on ourselves for not seeing the …
Riksbank keeps all options on the table The minutes from the Riksbank’s policy meetings are never what one would call page-turners. However, the account from the November meeting (released on Monday) was a bit more interesting than usual given that two of …
11th December 2020
This week has brought little festive cheer on the virus front, with France announcing that with daily new infections no longer falling rapidly, many of the restrictions will stay in place for three more weeks, with an 8pm curfew only lifted for Christmas …
Swedish services PMI defying gravity, for now The strong set of manufacturing PMIs from Switzerland and Sweden in November mirrored the survey from Germany and did not come as a huge shock. The pick-up in Sweden’s services PMI, released yesterday, was …
4th December 2020
Brighter times ahead The week’s data releases have been a mixed bag. The good news is that retail sales rose by 1.5% m/m in October which lifted them to 3.1% above their February level. But things have taken a turn for the worse since then. The services …
Sweden in the limelight It has been a Sweden-centric week, rounded off with a raft of economic data released this morning. The most noteworthy of which was the second reading of Q3 GDP, which was revised up from the initial estimate (+4.9% q/q versus …
27th November 2020
Mounting evidence of Q4 contraction Data published this week for November added to the evidence that the euro-zone economy will experience a sharp contraction in Q4, at least by pre-pandemic standards. The Economic Sentiment Indicator declined, and the …
The cavalry are coming, but not for a few months We are increasingly optimistic that vaccines against COVID-19 will be distributed at least to priority groups in the first half of next year . There are logistical challenges but they look manageable. (See …
20th November 2020
Minkgate rumbles on in Denmark The political wrangling in Denmark following the outbreak of COVID-19 in the country’s mink farms shifted up a gear this week. The main point of contention remains that the government did not have the legal basis to order …