BoAML | Even with structural reforms, trend GDP growth may not be consistent with comfortable debt sustainability in key peripherals by the time inflation normalizes. If the euro area does not make progress towards fiscal union in the meantime, the ECB will likely have to remain involved on the bond market.
The 2008 financial crisis was not a one-off event. The resources that were available to cope with that crisis would not necessarily be there if there was another crisis. Government debt and GDP ratios are still high, and pension and health costs are escalating across Europe.
BARCLAYS | Euro area Q1 preliminary GDP was revised down slightly to 0.5 % q/q from the flash release (-0.03pp), accelerating from Q4 0.3% q/q growth. German GDP rose 0.7% q/q, in line with our expectations, as robust domestic demand offset weak exports.
James Alexander via Historinhas | A couple of my recent posts have focused on the immeasurability of inflation and the consequent immeasurability of RGDP. And, therefore, the unsuitability of using either as a guide to monetary policy, especially a notional “gap” between an unmeasurable RGDP and a theoretical maximum, but still unmeasurable, RGDP.
UBS | We conducted a survey to determine whether Eurozone corporates are starting to invest again, and how this would be funded – a crucial question not just for the business cycle, but also for individual sectors and stocks.
James Alexander via Historinhas | Despite all the pessimism the Euro Area nearly caught up with US NGDP growth in Q4. Now that Italy and Spain have finally reported their Nominal GDP figures Eurostat shows that 4Q15 NGDP growth for the Euro monetary region as a whole was almost as fast, year-on-year, as the US.
The ECB’s main priority will be to fuel confidence in the financial markets and inflation will be its alibi for this. In February, eurozone CPI receded to -0.2% year-on-year and, in the short term, the region should be prepared for negative rates to continue.
Goldman Sachs | While we expect that the combination of the fall in oil prices, the rise in the Euro and the weakening of equity prices will have relatively limited effects on growth, the effects on the near-term inflation outlook are likely to be much more substantial.
The figures issued by the Bank of Spain have confirmed what we could already see with the naked eye; namely that Spaniards are losing their fear of the future and spending again. After several years of austerity, the consumers in Spain have gradually loosened their purse strings over the past year. And to such an extent that consumer spending rose 3.1% in 2015, almost tripling the 1.2% registered a year earlier.
Francisco López |The OECD has once again downgraded its outlook for global growth, especially for the Eurozone. It will only grow 1.4% this year, almost half a percentage point less than the previous forecast in November. But is the downwards revision the result of the sharp drop in share prices, or is it the stock market which is in fact anticipating that growth will slow in the coming months?