The ECB meeting this week should be a non-event, but risks are for a hawkish surprise in tone. We will be all ears on two elements: the timeline and the motivation for the review that starts this week and finishes before the end of 2020.
Norbert Rücker (Head of Economics & Next Generation Research, Julius Baer) | The outline of the EU Green Deal, was announced yesterday with an overwhelming price tag underpinning its ambitions.The outline is comprehensive but vague, and the impact is elusive to date. Market forces continue to drive the transition.
(European Views) | The European Commissioner for Internal Market and Services Thierry Breton has rejected claims that relying on European firms in the ongoing 5G network roll-out would cause substantial delays, commenting on rising tensions in Germany over the possible risks posed by Chinese firm Huawei Technologies.
Unemployment rate in the Eurozone in November stood at 7.5%, in line with estimates. This minimum level was reached in June 2019.
The ECB recently published a paper in which it reviews its monetary policy over the last 20 years. Among other points, the central bank says that interest rates in EMU countries could deepen further into negative territory before being counterproductive.
In Spain, the harmonized inflation rate in November stood at 0.5%, three tenths more than in October
Intermoney | From the perspective of the Eurozone’s labor costs, it was possible to highlight the maintenance of its dynamism, despite its small step back in 3Q19 to moderate up to 2.6% a.
The European Commission estimates that “meeting the current climate and energy objectives by 2030 will require an additional annual investment of € 260bn.” The requirement of stricter standards by 2030 and that there are no net emissions in 2050 will require the mobilization of the public and private sectors.
Christine Lagarde gave her press conference as the head of the ECB yesterday. While alerting of the risks that the eurozone is facing, she promised to maintain both the official rates and the monetary stimuli of her predecessor Mario Draghi. However, the market’s focus was on the announcement of a broad “strategic review” of the ECB’s monetary policy, the first since 2003. This was interpreted as a possible change in the ECB targets, including inflation below 2%. Banks bounced with over + 3%.
Bank of America | We think that the next decade in Autos will be all about electrification (global CO2 targets), slower car sales growth, mobility services and a greater focus on cost reforms (material costs, capacity rationalization & personnel costs). Following two years of declining global car sales, we think 2020 could see flat growth. However, we do not believe that this will be enough to offset cost pressures in an industry burdened by high fixed costs (labour) and rising regulatory charges (CO2).