Author Archive

Euro construction momentum could remain strong

Since the beginning of the year, euro area capital expenditure has picked up noticeably. The acceleration has been mainly driven by the construction sector (which accounts for almost 50% of total capital expenditure), while business equipment has continued to expand strongly. Construction activity is still 19% below its pre-crisis (2008) level, and has room to […]

Suspense in Catalonia

This morning, the Catalan president failed to answer clearly whether Catalonia had declared independence or not. He reiterated that he had placed last week’s unilateral declaration of independence on hold in order to open up a “two-month process” to try to reach a deal with the central executive. Spanish Prime Minister Mariano Rajoy warned that […]

Switzerland not far from being deemed a ‘currency manipulator’ by the US

In the next few days, the U.S Department of Treasury will publish its semi-annual report on International Economic and Exchange Rate Policies. Switzerland is one of six countries on the department’s monitoring list, as it meets two of the three conditions established by the US Treasury to be deemed a ‘currency manipulator’. The country has […]

The declining link between the credit impulse and domestic demand

The ECB’s M3 and credit report for August published this week was pretty strong overall and confirmed the ongoing improvement in lending dynamics in the euro area. Bank credit flows to the private sector (adjusted for seasonal effects and sales and securitisations) amounted to €17bn in August, lower than the July figure of €39bn. In […]

Business surveys show strong end to Q3 in euro area

Flash PMI surveys for the euro area ended the third quarter on a strong note. The composite flash PMI increased to 56.7 in September from 55.7 in August against consensus expectations for a stable print (55.6). The breakdown by sub-indices showed pretty strong signals in most forward-looking components, with the sole weak spot manufacturing new […]

Euro area, revisiting the past once again

Revisions to GDP figures have been massive in the euro area and in Switzerland following the publication of Q2 GDP data. The resultant changes in our forecasts are mechanical, and do not reflect a change in our growth profile for H2 2017 and beyond. Recent data released by Eurostat have resulted in a further upward […]

The SNB still in wait-and-see mode

The SNB’s 14 September meeting could be one of the most interesting in a while, as it comes just after a period when the Swiss franc has witnessed significant depreciation, mainly against the euro. The key focus of the SNB’s September 14 meeting will be its assessment of exchange rate moves. We do not expect […]

Business survey points to continued euro area strength

Markit’s composite flash purchasing managers index (PMI) for the euro area remained broadly stable at 55.8 in August, slightly above consensus expectations (55.5). By sector, the manufacturing PMI increased to 57.4, from 56.6 in July, offsetting a decline in the services PMI (-0.5 points to 54.9). The euro area composite PMI is now consistent with […]

France & Spain : Strong Q2 GDP growth performance

France and Spain today were the first big countries in the euro area to publish GDP growth figures for Q2 2017. French real GDP rose by 0.5% q-o-q in Q2 2017, the same pace as the two previous quarters. The details showed that domestic demand remained solid, while the sharp improvement in net exports offset […]

Euro area : Momentum slows at the start of Q3

The composite flash PMI fell to 55.8 in July from 56.4 in May, below consensus expectations (56.2). The headline dip was entirely driven by the manufacturing index, which fell to 56.8 in July from 57.4 in June. By contrast, the services index remained stable at 55.4. The PMI’s forward-looking components remained pretty strong, despite edging […]

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