The euro, government debt and Mario Draghi Given that the economic background in the eurozone has remained depressed, the recovery by the euro and European markets since summer 2012 is all the more spectacular. A good example of this divergence is the fact that, while outstanding Italian government debt has risen from one all-time high […]
In May, flash manufacturing PMIs decreased in both Germany and France. Indeed, the German manufacturing PMI decreased by 1.2 points to 52.9, below consensus expectations (54.0). The fall was led by a decrease in both the new orders and output components. The new export orders subcomponent continued its downward trend by declining for the fourth […]
Divergence between the German economy and the rest of the euro area was wide. Therefore, yesterday’s modest GDP figures increase pressure on the ECB to take bold decisions on 5 June. Fragile recovery in the euro area Eurostat’s preliminary estimate showed that euro area real GDP grew by 0.2% q-o-q in Q1 (0.8% q-o-q annualised), […]
The prolonged low level of inflation and the stubbornly high level of the euro seem to have finally convinced a majority of the ECB’s Governing Council (GC) to act. In a rare pre-committed statement, Mario Draghi announced yesterday that the GC is comfortable with acting in June. However, at this point we do not expect […]
The euro area’s PMI levels are now consistent with GDP growth of 0.4-0.5% q-o-q in Q2, slightly above our forecast. However, there is still a gap between surveys and hard data. Moreover, the strength of the euro, the Ukrainian crisis and the Chinese slowdown might dent exports, the main driver of GDP growth in 2014. As a […]
After four months of consecutive rises, the euro area flash manufacturing PMI slipped by 1 point to 53.0 in February, below consensus expectations (54.0). In contrast, the euro area services PMI inched up marginally from 51.6 in January to 51.7 in February, below consensus expectations (51.9). As a result, the composite PMI which is the […]
Monetary developments weakened further in December. The annual growth rate of eurozone M3 monetary aggregate slowed to 1.0% y-o-y in December after posting 1.5% y-o-y growth in November, below consensus expectations (1.7% y-o-y) and posting the lowest annual growth rate since September 2010. Meanwhile, lending to the private sector remained at -2.3% y-o-y in December, […]
As expected, nothing concrete was announced yesterday. Nevertheless, Mario Draghi hinted at some interesting points, but it required reading between the lines. During the press conference the ECB president emphasised the central bank’s forward guidance. On several occasions he referred to the current low level of inflation and the risk of seeing this situation last longer: […]
After two consecutive months of decline, German industrial production, including construction, increased by 1.9% m-o-m in November, much better than consensus expectations (1.5% m-o-m) and therefore more than reversing the 1.2% m-o-m contraction in October. Nevertheless, on average (October and November) for Q4, industrial production is still 0.2% q-o-q below the Q3 average. Factory orders […]
The Ecofin Council has finally reached an agreement on a general approach to a Single Resolution Mechanism (SRM) with the creation of a single decision body named the Single Resolution Board (SRB) and a Single Fund for the resolution of banks (SRF). The adoption of an SRM is a necessary element for the euro area […]
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