Euro Area
Does the recent surprise rate cut by the Swiss National Bank augur other dovish surprises among major central banks in Europe?
The 2.1-point increase in Germany’s Ifo Business Climate index in March brought it to a 9-month high of 87.8 and beat expectations of a more muted rise to 86.0. Both current economic conditions (+1.2 to 88.1) as well as expectations for the next six months…
The flash PMI estimates for March produced a mixed update on manufacturing and service sector activity in the US and Eurozone. In the US, the results suggest that growth is more resilient in the manufacturing sector than in services. The…
Citigroup’s economic surprise index for the Euro Area has been on a steady ascent since mid-2023. Its continued increase after breaking into positive territory at the start of February indicates that the region’s economic data are generating positive…
Various indicators of Eurozone wage growth have cooled off in recent months. Notably, the labor costs index eased sharply from a downwardly revised 5.2% y/y to 3.4% y/y in 2023Q4 – the slowest pace of increase since Q3 2022. Alternative measures such as…
The Eurozone Sentix Economic index improved from -12.9 to -10.5 in March, marking a fifth month of improved sentiment amongst investors and economic agents. Notably, the Expectation subindex rose to a 25-month high of -2.3 from -5.5 in February. The Current…
According to BCA Research’s European Investment Strategy service, last week’s ECB meeting confirmed their long-held view that the most likely date for the first ECB rate cut would be June. The ECB continues to acknowledge that the European economy is soft…
We are pushing back the anticipated start date for a Eurozone recession and assessing how it affects our equity stance.
BCA’s European Investment Strategy team continues to expect the German economy to trail that of the rest of Europe. Since 2020, Germany has fallen behind, with its real GDP lagging that of the broader Eurozone by 5%. The contribution of consumption to GDP…
The stock market of the Eurozone’s largest economy keeps grinding higher with the DAX 40 closing at new highs last week. Since its October low, the index of German blue-chip companies advanced by 20%. Does this rally have legs? On a relative basis,…