Europe Economics Weekly More weak data ahead of April ECB meeting This week brought more disappointing data for the euro-zone. The ECB is unlikely to respond by loosening policy further at its meeting next Wednesday, but we think that it won’t be long before the... 5th April 2019 · 1 min read
ECB Watch Policymakers to pause in April After making some fairly big changes in early March, the ECB will probably be happy to leave things as they are at next week’s meeting. President Draghi will have no choice but to give a downbeat... 4th April 2019 · 1 min read
Europe Economics Update ECB worrying about downside risks The account of the ECB’s 7th March monetary policy meeting makes gloomy reading. It confirms that policymakers were worried about downside risks to their growth and inflation forecasts, even though... 4th April 2019 · 1 min read
Europe Chart Pack Economy close to stalling We suspect that GDP increased by only 0.1% in the first quarter of this year. The divergence between the manufacturing and services sectors has, if anything, increased, and this in turn has... 4th April 2019 · 1 min read
Europe Data Response Euro-zone Retail Sales (Feb.) & Final PMIs (Mar.) February’s retail sales data suggest that household spending growth picked up a bit in Q1. But the Composite PMI, together with other surveys, suggests that GDP growth might have slowed. 3rd April 2019 · 1 min read
Global Markets Update We forecast the euro to fall more in 2019, before rallying We have revised down our already-bearish end-2019 forecast for the euro against the US dollar. Nonetheless, we still think that the exchange rate will bounce back in 2020 as looser monetary policy in... 2nd April 2019 · 1 min read
Europe Data Response Euro-zone Flash HICP (Mar.), Final Mfg PMIs (Mar.) March’s decline in euro-zone headline inflation was largely due to the timing of Easter, so the continued weakness in the manufacturing PMIs will be a bigger worry for the ECB. 1st April 2019 · 1 min read
Europe Commercial Property Outlook Capital value outlook boosted by lower risk-free rates With the euro-zone economy set for a period of weak growth, the outlook for rental growth across the sectors is poor. While this would normally lessen the case for yields to fall further, with risk... 29th March 2019 · 1 min read
Europe Economics Update Tiered ECB deposit rate would be a dovish signal If it is introduced (which is far from certain) a tiered deposit rate would reduce the cost of negative interest rates for banks, but it would do so by only a trivial amount. Its main purpose would be... 29th March 2019 · 3 mins read
Europe Data Response EC Business and Consumer Survey (Mar.) March’s decline in the euro-zone’s Economic Sentiment Indicator (ESI) adds to the evidence from other surveys that the economy has continued to lose momentum. And there is no sign that either the... 28th March 2019 · 1 min read
Europe Economics Weekly Euro-zone likely to have grown slowly again in Q1 This week delivered more data which suggest that the euro-zone economy grew at a meagre pace in Q1. And the Composite PMI is now at a level where the ECB has often loosened monetary policy in the past... 22nd March 2019 · 1 min read
Europe Data Response Euro-zone Flash PMIs (Mar.) The drop back in the euro-zone Composite PMI for March comes as a disappointment to those hoping that the economy was beginning to turn a corner. And far from easing, as many had anticipated, the... 22nd March 2019 · 1 min read
Global Markets Update Will monetary policy rescue E-Z peripheral bonds? We expect bonds in the euro-zone’s “periphery”, particularly in Italy, to come under renewed pressure in the rest of 2019 as growth remains weak and political risks creep up. However, we think that... 20th March 2019 · 1 min read
Global Markets Update The 10-year Bund yield may be heading to zero Growing safe-haven flows in 2019 and the ECB re-starting its net asset purchases in 2020 may mean that the yields of “core” European government bonds (EGBs) fall further over the next two years. 20th March 2019 · 1 min read
Europe Commercial Property Update Could QE bring even lower property yields? The odds have tipped towards the ECB re-starting its QE programme next year. This would increase the likelihood of further reductions in euro-zone prime property yields, but, as yet, this expected... 19th March 2019 · 1 min read
Europe Economics Update Wage growth likely to stop rising this year Euro-zone labour cost growth edged down in Q4 and, in contrast to the ECB, we don’t expect it to start rising again this year. This suggests that upward pressure on core inflation will remain muted. 19th March 2019 · 1 min read
