Germany
Tuesday’s German IFO survey corroborates the downbeat message from Monday’s flash PMI estimate highlighting weak economic conditions. The headline Business Climate Index dropped 1.3 points to 87.3 in July – its weakest level since November, and below…
Eurozone producer prices fell by more than anticipated in May. The -1.5% y/y decrease – which marked the first annual drop since December 2020 – was more pronounced than expectations of a -1.3% y/y decline and followed a downwardly revised 0.9% y/y increase…
The preliminary inflation prints for June in the major euro area economies highlight a growing divergence in inflation outcomes. There was good news: headline CPI inflation in Italy fell to 6.7% in June from 8.0% in May, while Spanish headline inflation fell…
As expected, the European Central Bank (ECB) delivered a 25bps rate hike on Thursday, raising the policy rate to 3.5% — the highest since August 2001. Moreover, the central bank maintained a hawkish bias, signaling that further rate hikes are likely in…
The message from the ZEW economic research institute’s June survey was mixed. On the one hand, the German Indicator of Economic Sentiment unexpectedly ticked up from -10.7 to -8.5. While the negative reading indicates that the pessimists continue to outnumber…
Tuesday’s German factory orders release sent a disappointing signal about industrial demand. Although the pace of decline eased from -10.9% m/m to -0.4% m/m in April, it fell below expectations of a 2.8% m/m increase. Both capital and consumer goods orders…
Over the past couple years, the price of natural gas has closely tracked the relative performance of European assets. Specifically, the underperformance of Euro Area stocks vis-à-vis US equities and the weakening EUR/USD coincided with the rally in natgas…
The lift to European investor sentiment from the ebbing energy crisis is now in the rear-view mirror. The German ZEW Indicator of Economic Sentiment fell back below 0 in May to -10.7 from 4.1. The negative reading indicates that the share of pessimists…
According to BCA Research’s European Investment Strategy service, a large set of variables points to some additional correction in European stocks over the coming months. The collapse in the Euro Area M1 is consistent with a significant decline in Eurozone…
Remain cautious and defensive overall. Stay long DM Europe over EM Europe. Look for EM opportunities in Southeast Asia and Latin America over Greater China.