Europe Economics Focus Draghi to go out with a bang Recent comments by Mario Draghi suggest that the ECB will loosen policy sooner than we had anticipated. We now expect the Bank to strengthen its forward guidance in July and cut its deposit rate in... 26th June 2019 · 24 mins read
Europe Data Response Euro-zone Flash PMIs (Jun.) The slight improvement in the flash PMIs for June will not be enough to deflect the ECB from its new plan to ease policy within the coming months. We expect it to cut its deposit rate by 10bp in... 21st June 2019 · 1 min read
Europe Economics Update Draghi spells out ECB’s dovish intentions Mr Draghi’s speech at the ECB’s conference this morning is the clearest indication yet that the Bank will cut interest rates and relaunch its asset purchase programme in the coming months if, as we... 18th June 2019 · 1 min read
Europe Data Response Euro-zone Trade (Apr.) Following March’s sharp fall, the euro-zone’s nominal goods trade surplus narrowed further in April. Given the softening of the export orders indices since the start of the year, we think that net... 18th June 2019 · 1 min read
Europe Commercial Property Outlook Total returns set to be sharply lower With the ECB likely to loosen monetary policy before too long, government bond yields look set to stay at very low levels for some time. As a result, we think that yield compression has a little... 18th June 2019 · 1 min read
Europe Data Response Euro-zone Labour Costs (Q1) The small pick-up in total labour cost growth to 2.4% y/y in Q1 was concentrated in the economies which have been hit hardest by the recent downturn and where the labour market has already begun to... 17th June 2019 · 1 min read
Europe Economics Weekly Euro looking undervalued, especially for Germany Following Mario Draghi’s more dovish comments earlier in the month, we now think the Governing Council is more willing to loosen policy further and have revised our already more-dovish-than-consensus... 14th June 2019 · 1 min read
DM Markets Chart Pack Unlike bond yields, we expect equities to fall further Investors are now even more dovish that we have long been about the outlook for monetary policy in the US. As such, we doubt that Treasury yields will drop further. However, we don’t expect looser... 14th June 2019 · 1 min read
Europe Data Response Euro-zone Industrial Production (Apr.) April’s decline in euro-zone industrial production, together with timelier survey data, suggests that the sector performed poorly in Q2. 13th June 2019 · 1 min read
Europe Economics Update Tweaking our (already dovish) ECB forecast Mr Draghi’s comments at the ECB’s press conference last week suggest that the Governing Council is gearing up to loosen monetary policy a bit earlier than we had anticipated. We now think it will... 12th June 2019 · 1 min read
Europe Economics Update ECB inching towards more QE The measures announced by the ECB today were underwhelming, but policymakers have been considering how to respond to any further economic weakness. All the signs are that they would favour more QE... 6th June 2019 · 1 min read
Europe Data Response Euro-zone GDP (Q1 2019, breakdown) The third estimate of euro-zone GDP in Q1 confirmed that the economy grew at a fairly strong pace, driven mainly by household consumption. But we think that growth will slow in Q2, and with core... 6th June 2019 · 1 min read
Europe Chart Pack Falling inflation expectations increase pressure on ECB Financial market measures of inflation expectations have fallen to levels at which the ECB has loosened policy in the past. Indeed, the ECB’s favoured measure of expectations – the five-year/five-year... 5th June 2019 · 1 min read
Europe Data Response Euro-zone Retail Sales (Apr.) & Final PMIs (May) The upward revision to May’s euro-zone PMI leaves it still pointing to GDP growth slowing in Q2. The fall in retail sales in April suggests this is partly due to subdued consumption growth. 5th June 2019 · 1 min read
Europe Data Response Euro-zone Flash HICP (May) & Unemployment (Apr.) The drop in the euro-zone’s headline inflation rate in May was largely due to lower energy inflation and a reversal of Easter timing effects. But with wage growth likely to have peaked, we expect core... 4th June 2019 · 1 min read
ECB Watch Bank to lay the groundwork for further easing Policymakers are likely to make two significant changes at their meeting next Thursday. They will probably announce that they expect to leave rates at present levels until at least mid-2020, rather... 30th May 2019 · 1 min read
