Euro Area
March flash PMIs point to rising inflation pressures, with the US more resilient than its DM peers. Input costs rose and delivery times lengthened across developed markets. Manufacturing was resilient, but services PMIs declined. The US PMIs pointed to…
The ECB held rates but higher energy prices complicate the outlook for inflation and growth. The European Central Bank left rates at 2%, but revised its forecasts. December projections pointed to an inflation undershoot, but forecasts now see both headline…
February flash PMIs edged higher, pointing to gradual improvement in global growth. After moving mostly sideways through 2025, developed markets PMIs are picking up. Manufacturing is showing decent momentum, rebounding after being weighed down by trade…
Relative macro momentum suggests scope for US tactical equity outperformance versus Europe. Just as macro momentum drives cross-asset returns, relative momentum helps explain cross-country equity performance. A simple measure is the difference in economic…
European sentiment has yet to reach escape velocity, with growth momentum still limited. The February ZEW showed expectations declining to 39.4 from 40.8 at the Euro Area level. In Germany, expectations fell to 58.3 from 59.6, missing expectations, while…
The ECB is about to make its first policy mistake in the current cycle by being complacent about the downside risks to inflation. The confluence of base effects, a stronger euro, food and energy deflation, and rapid services disinflation will push headline inflation closer to 1% in the first half of the year. This significant undershoot will force the ECB to deliver reflationary cuts. Go long the September 2026 3-month Euribor futures and tactically reduce exposure to inflation-linked bonds in the Eurozone.
Euro area January flash HICP inflation cooled in line with expectations; mixed sentiment and limited growth momentum leave scope for insurance cuts by the ECB later this year. Euro area January flash HICP inflation was roughly in line with estimates and…
Peripheral Europe is driving the region’s resilience, and finally closing the gap with the core. Our Chart Of The Week comes from Jeremie Peloso, Chief European Investment Strategist. The resilience of the European economy and strong equity performance in…
January flash PMIs point to better, though unspectacular, global growth momentum. Developed markets PMIs showed improvement in global growth momentum. PMIs have largely moved sideways through 2025, with manufacturing now recovering after trade uncertainty and…
January Euro area sentiment improved, but growth momentum remains limited as tensions with the US rise and reflationary ECB cuts remain possible. January sentiment brightened in the Euro area. The ZEW survey beat expectations for Germany, with both current…