Against the fall expected by consensus (-0.1% m-o-m and weak industrial surveys1), German industrial production increased by 1.2% m-o-m in March. The rise was the second consecutive monthly gain. The February figure was revised up marginally from 0.5% m-o-m to 0.6% m-o-m. As a result, over Q1 as a whole, production increased by 0.2% q-o-q, better than Q4’s 2.6% […]
Thursday’s European monetary announcement only true surprise in terms of monetary policy was that the Governing Council appears to be seriously considering a negative deposit rate. However, as it is a two-edged tool, its impact on bank loans would be uncertain. No clear guidance to unlock the credit crunch A decision to buy asset-backed securities […]
According to Eurostat’s flash estimate, euro area annual inflation is expected to be 1.2% in April, down from 1.7% in March and well below consensus expectations of 1.6% y-o-y. It is the largest monthly fall since May 2009 and also the lowest level since February 2010. Moreover, the euro area’s core annual inflation (inflation excluding […]
Manufacturing PMI worse than expected For the second month running, the manufacturing PMI showed a decrease. Indeed, the flash euro area manufacturing PMI dropped to 46.5 in April from 46.8 in March, below consensus expectations (46.7). By contrast, the flash euro area services PMI posted a slight rise of 0.2 point to 46.6 in April, […]
The painstaking and painful process of resolving the Cyprus crisis reminded investors the ‘solvency risk’ facet to the eurozone systemic crisis had not been dispelled. At this stage though, financial markets seem to be more prone to bewilderment than struggling to cope with any spreading of the contagion. Economic indicators in the US, by way of contrast, have been reasonably positive, enough to enhance […]
The final version of the bailout for Cyprus spared savers with deposits of less than EUR100,000 from being forced to contribute towards rehabilitating and recapitalising the island’s ailing banks. Nevertheless, mere mention of a levy being imposed on deposits was enough to send a fresh crisis of confidence rippling through the eurozone. At the time of writing, the waves do […]
In this issue: Editorial outlook: Financial repression reaches Cyprus (p2) Macroeconomics: Eurozone holding its breath over Cyprus (p4) Strategy: Cyprus has sown confusion rather than contagion (p6) Headline news from around the world (p8) Asset classes: Banking shares under pressure (p10) Topic of the month: Solving the Cypriot crisis (p12) Key figures (p15) Download Perspectives in your language: English / Français / […]
The Cypriot parliament’s overwhelming rejection of the proposed levy on bank deposits has piled confusion upon uncertainty. In this note, we have looked back at the origins of the crisis, explored the kind of options left open to the authorities and pinpointed some of the consequences for investors. Origins of the crisis The attractiveness of […]
We maintain our forecast of a 0.1% q-o-q GDP contraction in Q1 2013 for the euro area as a whole, and respectively -0.5% (consensus: -0.1%) for 2013 and 0.9% (consensus: 0.9%) for 2014. Worse than expected Euro area industrial production fell by 0.4% m-o-m in January, worse than the 0.1% m-o-m decrease expected by the […]
We continue to be very pessimistic on the likelihood of the euro area periphery getting out of recession by themselves or being towed out by their export sector. We therefore maintain our forecast of a rate cut in H2 and continue to think further non-orthodox measures will have to be adopted by the ECB in […]
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