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?
UBS | Tracking Europe’s resilience In this report, we aim to shed light on the question we have been asked most frequently in recent weeks: “Can Europe hold up when problems elsewhere are getting worse?” So far, the Eurozone has held up respectably, which we attribute to the fact that European growth is mainly driven by domestic demand, not exports. We believe this should also provide Europe with decent resilience going forward.
Emilio Ontiveros | The Spanish economy grew more than its European counterparts and current tailwinds such as low oil prices also favour it over the rest of the member states. But the country still has a lot to do to become a major league player.
James Alexander via Historinhas | Almost alone among economic commentators we do actually look at Nominal GDP data as it is released. Full Euro Area NGDP data for third quarter 2015 was released this week alongside the 2nd estimate of Real GDP. We have already posted here and here on the good news as three of the “big 4” Euro Area countries, making up 75% of the Euro Area economy, had seen accelerating NGDP. The not so good news is that the little countries saw less acceleration.
James Alexander via Historinhas | While we firmly believe NGDP expectations are the best guide to monetary policy we are still some way from having a proper market measure of those expectations. However, two of the peripheral countries, Spain and Italy have now produced their first estimate of NGDP for 3Q.