The advances in inflation figures throughout the Eurozone will be a subject of debate in the coming weeks, not least because of its bigger-than-expected rise. An increase which has a common thread in the form of hikes in energy prices and, to a lesser extent, in food prices.
It was expected Draghi to avoid any discussion of early exit from QE and he did so. The ECB’s president stuck to the December line. “Self sustained”, not “transient” inflation is wanted. Still, things may complicate this spring.
Julius Baer | Eurozone inflation is approaching its highest level since late 2013 with a December reading on Wednesday at 1.1%. A glance at the core inflation rate, which excludes the volatile food and energy component, delivers the explanation of the recent surge
As far as the global economy is concerned, 2017 will be the year when new US President Donald Trump will make his mark. That said, how far his influence will reach is still uncertain as it is still too soon to know how many of his policies will be implemented.
The European banking system is much larger than the US’, namely three times –$33.2 trillion against $13.4 trillion. Hung Tran, Executive Managing Director at the Institute of International Finance, explained to The Corner how this could result in the Eurozone becoming one of the world’s lenders.
BoAML | Euro area GDP grew 0.3% qoq in 3Q, in line with consensus expectations and our tracker. Meanwhile, inflation was again weaker than the release would suggest, if we look at the finer details.
The inflation rate for the Euro Area (flash estimate) was at +0.4% in September. It is the highest since October 2014. In August the inflation rate was at 0.2%. The core inflation rate was stable at 0.8%. The explanation has to be found in the oil price profile as said by Philippe Waechter, Chief Economist at Natixis AM.
At a time when euroscepticism is on the rise in Europe, debate also continues over the pros and cons of a two-speed euro.
Peter Lundgreen via Caixin| What should be deeply worrying about the growing banking crisis in Italy is the origin of the non-performing loans. One significant sector is retail and wholesale, meaning it’s a widespread problem. A severe banking crisis is a shock for any economy and will, in many cases, hamper economic growth. This is the risk that Italy and the Eurozone are facing.
The impact of Brexit on the markets has gone through different stages. There was the initial upheaval in the wake of the referendum result, which had its maximum effect on June 24 when the Ibex recorded its biggest ever fall. And now the stock market and European public debt yields have recovered to pre-Brexit levels.