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No hint of Swiss rate rise

At its latest policy meeting on 16 March, the Swiss National Bank (SNB) left the interest rate on sight deposits at a record low of -0.75% and the central bank reiterated its willingness to intervene in the foreign exchange market if needed, “taking the overall currency situation into consideration”, as it had mentioned in its […]

Switzerland: modest recovery remains on track

The Swiss statistical agency (SECO)’s quarterly estimates show a provisional GDP growth rate of 1.3% in 2016 compared with 0.8% in 2015. Two aspects of today’s report are worth mentioning. First, on the expenditure side, both domestic demand components and foreign trade helped to boost Swiss growth in 2016. It was a much better year […]

Euro area: latest figures raise our 2017 GDP forecast to 1.5%

Euro area real GDP expanded by 0.5% q-o-q in the fourth quarter, marking an acceleration from Q3’s 0.4% gain. The euro area economy grew at an annual average of 1.7% in 2016, compared with 1.9% in 2015. Last year was the first time since 2008 that real GDP growth in the euro area was above […]

First tightening of euro area credit standards in three years

Credit standards on loans to euro area enterprises tightened in Q4 2016 for the first time in three years. The move was essentially driven by developments in the Netherlands. Demand for credit continued to rise across all categories of loans, once again driven by generally low interest rates and M&A activity. Looking ahead, banks expect […]

The ‘Frankenshock’, two years on

On 15 January 2015, the Swiss National Bank (SNB) decided to discontinue the minimum exchange rate of CHF1.20 per euro introduced in September 2011. The SNB’s announcement came as a shock for the Swiss economy, and resulted in a sharp appreciation of the Swiss franc. But two years later, the Swiss economy has proven to […]

Euro area headline inflation rises at fastest pace since September 2013

Euro area flash HICP inflation rose from 0.6% in November to 1.1% year on year (y-o-y) in December, while core inflation increased slightly to 0.9%, both above consensus expectations. The breakdown by components showed that the main driver of the increase was energy prices. In the next few months, euro area inflation is likely to […]

Referendum at heart of Italian uncertainties

The 4 December referendum on senate reform is the next big event on the European political calendar, coming just ahead of the next ECB and Fed policy meetings on 8 December and 14 December, respectively. We believe a ‘Yes’ vote would boost government confidence and marginally help Italian securities, but is unlikely to represent a […]

Euro area GDP growth in line with expectations

Euro area real GDP expanded at a quarter-on-quarter (q-o-q) rate of 0.3% in Q2 (1.4% q-o-q annualised, 1.6% year on year), in line with expectations and our own forecast. This comes after GDP growth of 0.3% q-o-q in Q2 and 0.5% q-o-q in Q1. Looking ahead, risks to our scenario for the euro area economy […]

Euro area business surveys point to strong start to Q4

Euro area business surveys just released show a solid start to the fourth quarter. More importantly still, these forward-looking indicators suggested that growth is likely to gain momentum in the months ahead, in particular in Germany. The good performance of the German manufacturing sector suggests that external demand might be less a drag than in […]

Spain: an end to 10 months of political deadlock

After 10 months of political impasse, Spain is set to have a new government at the end of this week. The decision by the Socialist party (PSOE) to abstain in the second parliament investiture vote clears the way for a minority government to be formed under prime minister Mariano Rajoy and thus avoids the need […]

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