Global Markets Focus EZ equities likely to hold up better than US equities We forecast that the MSCI EMU Index will fall by another 13% this year as the US joins China and the euro-zone in an economic slowdown. Nonetheless, a resolution to the trade war could see equities in... 12th March 2019 · 1 min read
Europe Chart Pack Economic growth still lacklustre Economic activity in the euro-zone seems to have remained sluggish in the first quarter of this year: we think GDP growth will be only 0.2% for a third successive quarter. This is largely due to... 11th March 2019 · 1 min read
Europe Economics Weekly ECB ahead of the curve, rebound in growth unlikely The ECB’s decision to launch more TLTROs and strengthen its interest rate guidance means that it is, at least for now, ahead of the curve. But we think the Bank is still too optimistic about economic... 8th March 2019 · 1 min read
Global Markets Update Market implications of the outlook for ECB policy We remain more dovish than investors about the outlook for interest rates in the euro-zone. But we still think that “risky” assets there will perform badly this year, as slowing global growth takes... 8th March 2019 · 1 min read
Nordic & Swiss Economics Update What could the SNB do to ease policy further? The more dovish than expected stance adopted by the ECB at today’s monetary policy meeting supports our view that the SNB will also keep rates lower for longer. And if the euro-zone economy... 7th March 2019 · 1 min read
Europe Economics Update Probability of more QE this year is rising The ECB did more than expected today, announcing another round of TLTROs and pledging to leave policy rates on hold at least until next year. But with economic growth and inflation likely to remain... 7th March 2019 · 1 min read
Europe Data Response Euro-zone GDP (Q4 2018, breakdown) The third estimate of euro-zone GDP in Q4 last year confirmed that the economy grew at only a moderate pace, and with the latest data fairly weak the ECB is certain to announce lower forecasts later... 7th March 2019 · 1 min read
Europe Data Response Euro-zone Retail Sales (Jan.) & Final PMIs (Feb.) The upward revision to February’s final PMIs does not change our view that GDP growth in the euro-zone was probably just 0.2% again in the first quarter of this year. Meanwhile, the increase in retail... 5th March 2019 · 1 min read
Europe Economics Update ECB growth forecasts to remain too optimistic Philip Lane, who is due to take over as the ECB’s Chief Economist in May, acknowledged last week that Q1 2019 will probably be the third successive quarter of below-potential GDP growth. We agree with... 4th March 2019 · 1 min read
Europe Economics Weekly Euro-zone growing slowly, Italy and Germany risks The survey evidence continues to suggest that the euro-zone economy is growing, but that it is doing so only slowly, with the services sector doing all of the heavy lifting. The industrial sector... 1st March 2019 · 1 min read
Europe Data Response Euro-zone Flash CPI (Feb.), Final Mfg PMIs (Feb.) The increase in the euro-zone’s headline inflation rate, to 1.5% in February, will be of little comfort to the ECB given that it masks a small reduction in the core rate to just 1.0%. Moreover, the... 1st March 2019 · 1 min read
ECB Watch ECB to cut macro forecasts, leave policy unchanged The ECB is likely to reduce its forecasts for economic growth at its meeting next week and to again stress that it has the necessary tools to respond if the recent slowdown worsens. But we think it... 28th February 2019 · 1 min read
DM Valuations Monitor End of QT unlikely to affect bond valuations much In his semi-annual testimony to Congress, Jerome Powell reiterated that the Fed is deciding how and when to end its balance sheet rundown. Although some officials have indicated that it could finish... 28th February 2019 · 1 min read
Europe Data Response EC Business and Consumer Survey (Feb.) February’s euro-zone Economic Sentiment Indicator (ESI) confirmed the message from other surveys that despite weakness in the industrial sector, the overall economy is still growing. That said, the... 27th February 2019 · 1 min read
Europe Economics Update Another look at the slowdown in the euro-zone The slowdown in euro-zone GDP growth in the second half of last year resulted from weaker exports and domestic demand, about half of which was due to problems in the car industry. But more recently... 26th February 2019 · 1 min read
Europe Economics Weekly Manufacturing recession, auto tariff threat The small rise in the composite PMI for the euro-zone, from 51.0 in January to 51.4 in February, came as a bit of a relief – especially as this was the first increase in six months. However, it leaves... 22nd February 2019 · 1 min read
