Continuum Economics Calendar August 2025

July 30, 2025 11:00 AM UTC

Data and Events Calendar August 2025.

Eurozone Flash GDP Review: Resilience or Irrelevance?

July 30, 2025 9:52 AM UTC

As we highlighted in our preview, for an economy that has seen repeated upside surprises and above trend growth, now some 1.4% in the year to Q2, GDP data do not seem to have had much impact is shaping, let alone dominating, ECB policy thinking. We think this will continue to be the case even after

EZ Real Economy – Diverging Sentiment Indictors Complicate Outlook

July 29, 2025 9:26 AM UTC

The ECB contends that the EZ economy has shown resilience of late.  Maybe so, albeit where GDP data (likely to average a satisfactory 0.3% q/q performance so far this year) are probably offering a misleading picture of underlying trends in real activity.  Indeed, recent GDP data gains have been pr

U.S.-EU Trade Agreement: More a Framework Than a full Deal

July 28, 2025 9:08 AM UTC

In what seems to have been a fully-fledged political capitulation to the U.S. the EU, it seems, is accepting an agreement that would see an almost-blanket reciprocal 15% tariff on its exports to the U.S.  But there still some imponderables, not least the range of sectoral concessions, whether EU me

ECB Review: Policy ‘On Hold’ Leaves Easing Door Open

July 24, 2025 1:48 PM UTC

Given the uncertainty overhanging policy makers worldwide, let alone in the EZ, the ECB was always likely to revert to stable policy after seven consecutive cuts which have taken the discount rate to its current 2%.  In a much shortened statement, but which was more willing to highlight disinflatio

EZ HICP Preview (Aug 1): Headline at Target as Services Inflation at Fresh Cycle-low?

July 23, 2025 10:35 AM UTC

HICP, inflation – now at target – is very much a side issue for the ECB at present, albeit with the likes of oil prices and tariff retaliation possibly accentuating Council divides.  Despite adverse energy base effects, we see the flash July HICP staying at June’s 2.0% but up from May’s eig

DM Rates: QT adds to Budget Deficits Pressures

July 22, 2025 10:05 AM UTC

·        Heavy issuance due to the U.S. budget deficit, plus Fed rate cuts will help further yield curve steepening in H2 2025.  In EZ and UK, ECB and BOE QT is large and amplifies the amount of debt that the rest of the market has to absorb, which will also drives yield curve steepening al

Eurozone Flash GDP Preview (Jul 30): A Pause that Does Not Refresh?

July 22, 2025 9:13 AM UTC

For an economy that has seen repeated upside surprises and above trend growth of 1.5% in the year to Q1, GDP data do not seem to have had much impact is shaping, let alone dominating, ECB policy thinking. We think this will continue to be the case even where the looming Q2 data may show a modest con

2yr Germany and ECB Expectations

July 21, 2025 10:07 AM UTC

·       Money markets are putting too much weight on ECB communications and we feel that a softening labour market/financial conditions and more tariffs from the U.S. will be enough to shift the ECB to deliver two final 25bps cuts in H2 2025.  Though the 2yr Germany to ECB depo rate spread w

ECB Preview (Jul 24, Part Two): Policy Pause Despite Tighter Financial Conditions

July 16, 2025 1:07 PM UTC

The next ECB Council meeting decision on Jul 24 looms but (as we noted in the part one preview) markets (understandably) sees no further cut, at least at that juncture.  However, we think that the ECB will ultimately still have to ease further - two more 25 bp cuts in H2 - and would not even rule o

ECB Preview (Jul 24, Part One): Labor Market Looking Softer than Council Thinking

July 15, 2025 8:45 AM UTC

The next ECB Council meeting decision on Jul 24 looms but where market (understandably) sees no further cut, at least at that juncture.  Indeed, the ECB may signal signs of economic resilience albeit noting that the added uncertainty emanating from the latest U.S. tariff threat warrants more circum

EU Blindsided by Latest Tariff Threat

July 14, 2025 6:56 AM UTC

Having announced over the weekend a 30% “reciprocal” tariff from August 1 on EU exports to the U.S., the EU seems to be a state of somewhat shock, wary that months of negotiations have failed, let alone succeeded in reducing the tariff threat from the original 20%.  In response, European Commis

Eurozone: Damage Limitations on Tariffs, Uncertainty to add to Banks' Caution??

July 9, 2025 9:37 AM UTC

It remains unclear just how much of a movable feast the new U.S. tariff deadline of Aug 1 actually is.  Trade deals with the US were supposed to be agreed by today, or face the reciprocal tariffs as outlined in April. But that has now been deferred to, with US Treasury Secretary Bessent, hinting ac

June ECB Council Meeting Account Review: Divides Continue if Not Widen

July 3, 2025 12:24 PM UTC

The account of the June 3-5 Council meeting just about left the door  open for a move at the July 24 policy verdict given the array of news (probably negative particularly regarding tariffs but also bank lending) due beforehand.  But the account adds to the impression we has initially that a pause

EZ HICP and ECB Strategy Review: Headline Up to Target as Services Inflation Rises Back?

July 1, 2025 9:32 AM UTC

Despite its updated its monetary policy strategy detailed yesterday, inflation – now at target – is very much a side issue for the ECB at present, albeit with oil prices possibly accentuating Council divides.  Admittedly, the flash June HICP rose a notch to 2.0% matching the -consensus, but up

Continuum Economics Calendar July 2025

June 26, 2025 1:00 PM UTC

Data and Events Calendar July 2025.

EZ HICP Preview (Jul 1): Headline Stays Below Target as Services Inflation Rises Back?

June 24, 2025 8:57 AM UTC

Inflation – now below target – is very much a side issue for the ECB at present, albeit with oil prices possibly accentuating Council divides.  Indeed, we see the flash June HICP staying at May’s below-consensus, eight-month low and below-target 1.9% (Figure 1).  More notably, having jumped

Eurozone Outlook: In Tariff Limbo Land?

June 20, 2025 9:24 AM UTC

·       Amid what may still be tightening financial conditions and likely protracted trade uncertainty, we have pared back the EZ activity forecast for 2026. However, the picture this year appears to be slightly better but this is largely a distortion and we think that the economy has instead

ECB: Time to Reassess and Slow QT?

June 10, 2025 2:25 PM UTC

Further ECB easing is on the cards, the question being whether this should start to encompass toning down quantitative tightening (QT) plans too! Notably, the two ppt fall in the discount rate cuts has come against a backdrop where the ECB has continued unconventional tightening by scaling back its

Eurozone: The Tail Wagging the Dog?

June 6, 2025 10:26 AM UTC

Given what now looks to have been an outstanding first quarter, the ECB’s assertion at this month’s Council press conference that it is a good position to navigate the uncertain conditions looks more tenable.  After all, GDP jumped 0.6%, twice the previous estimate.  But this is no indicator o

ECB Council Meeting Review: Easing Window Stays Open

June 5, 2025 1:58 PM UTC

This widely seen 25 bp deposit rate cut (to 2.0%) now means the previous degree of tightening has been effectively halved.  Notably, it comes alongside an ECB policy and economic outlook/bias little changed from that of recent months.  The door is thus left open for a move at the July 24 policy ve

EZ HICP and Labor Market Review: Headline Back Below Target as Services Inflation Reverses Easter Effect

June 3, 2025 9:42 AM UTC

EZ HICP inflation met our below-consensus expectation in dropping to an eight-month low and below-target 1.9% (Figure 1) helped by rounding and a further m/m fall in fuel prices.  More notably, having jumped 0.5 ppt to 4.0% in April, very probably due to the impact of the timing of Easter affecting

ECB Council Meeting Preview (Jun 5): Much Earlier Sub-Target Inflation Outlook?

May 28, 2025 2:30 PM UTC

What is widely seen as an eighth 25 bp deposit rate cut in the current cycle on June 5 may be overshadowed by the ECB’s implicit if not explicit shift about the outlook thereafter.  The door will be left open for a move at the July 24 policy verdict given the array of news (probably negative part

Continuum Economics Calendar June 2025

May 27, 2025 1:00 PM UTC

Data and Events Calendar June 2025.

EZ HICP and Labor Market Preview (Jun 3): Headline Back Below Target as Services Inflation Reverses Easter Effect?

May 27, 2025 11:17 AM UTC

Exceeding expectations, EZ HICP inflation failed to fall in April, instead staying at 2.2%.  More notably, services inflation jumped 0.5 ppt to 4.0%, very probably due to the impact of the timing of Easter affecting airfares and holiday costs. As already seen in flash French May numbers, and as was

Eurozone: US Stepped-Up Tariff Threat – Negotiations or Concessions?

May 27, 2025 9:22 AM UTC

At least within markets there is some relief that President Trump has deferred his ramped up 50% tariff threat from early June to July 9.  Unambiguously positive is the fact that a better line of communication, if not rapport, now seems to exist between the U.S. president and EU Commission Presiden

Eurozone: Waging War on Wages

May 23, 2025 1:35 PM UTC

After a protracted period of elevated EZ cost and price pressures, a reversal seems to be very much underway.  Headline and underlying HICP inflation have moved back toward target, but to reinforce this downtrend there are an increasing array of softer cost pressure signals.  ECB wage tracker and

ECB April Account: Neutral Rate Not Necessarily a Terminal Rate

May 22, 2025 12:46 PM UTC

The account of the April 16-17 ECB Council meeting suggested that the policy decision was more of a clearly agreed consensus, this papering over continued divides regarding the outlook; the risks from tariffs; and where inflation risks lie.  The seventh and widely expected 25 bp deposit rate cut (w

Eurozone: Services Offer Sobering News

May 22, 2025 9:00 AM UTC

The May flash composite PMI data may have fallen into apparent contraction territory as the index dropped to 49.5 in May from 50.4 in April, below the 50.0 no-change mark for the first time in five months and thereby signalling a reduction, albeit a marginal one.  We do not take much issue whether

Eurozone: The European Commission Diverges From the ECB on Inflation

May 19, 2025 10:07 AM UTC

The European Commission (EC) Spring Forecast projects real EZ GDP growth in 2025 at 0.9%, some 0.4 ppt below its previous (autumn) view.   There is also a downgrade to the 2026 growth picture by 0.2 ppt to 1.4%, projections that carry downside risks and where we think they are still too optimistic

Europe Portfolio Leverage Over Trump

May 14, 2025 9:05 AM UTC

The U.S. will likely introduce a 25% tariff on pharmaceuticals, which will increase pressure on the EU and other European countries (e.g. Switzerland) and also delay serious negotiations close to the 90 day reciprocal tariff deadline on July 9, adding to pressure on Europe by deliberately prolonging

Eurozone Labor Market: Rising Supply Adding to Lower Wage Pressures

May 7, 2025 9:34 AM UTC

With the EZ jobless rate nestling at record lows, it would support the ECB assessment that the EZ labor market is strong, the central bank seeing only a small rise in the jobless rate this year and on to be reversed from early next year onwards.  However, that glosses over the fact that the labor m

EZ HICP Review: Headline Fails to Fall as Services Inflation Rises on Easter Effect?

May 2, 2025 9:46 AM UTC

EZ HICP inflation failed to fall back toward the 2% target in flash April data, instead staying at 2.2%.  More notably, services inflation jumped 0.4 ppt, very probably due to the impact of the timing of Easter affecting airfares and holiday costs. As was the case when this Easter effect last happe

Continuum Economics Calendar May 2025

April 28, 2025 10:03 AM UTC

Data and Events Calendar May 2025.

EZ HICP Preview (May 2): Headline Lower Again But Mainly Energy?

April 24, 2025 8:39 AM UTC

EZ HICP inflation is likely to fall back to the 2% target in flash April data, this six-month low would largely reflect a fall in fuel prices, but with services largely consolidating the clear fall seen last time around (Figure 1).  All of which would mean a stable core reading of 2.4% but where th

Eurozone Flash GDP Preview (Apr 30): The Calm Before the Storm that Surveys May Be Flagging?

April 23, 2025 9:18 AM UTC

Continuing a series of upside surprises, EZ GDP overshot both consensus and ECB expectations in Q4), albeit only after what was a cumulative 0.2 ppt upward revisions compared to the flash. We see a further rise in Q1 data (Figure 1), partly reflecting recent m/m increases in both manufacturing and s

ECB Review: Discussing Policy Restriction No Longer Appropriate

April 17, 2025 1:48 PM UTC

A seventh and widely expected 25 bp deposit rate cut was overshadowed by the ECB’s communication shift about the outlook hereafter, no longer talking about how restrictive policy may be.  This shift is entirely appropriate not least given the manner in which financial conditions are now tightenin

Eurozone Banks Offer ECB More Cause for Concern

April 15, 2025 11:14 AM UTC

The ECB can draw comfort from signs that credit demand and supply for EZ households continues to improve.  But the ECB’s latest bank lending survey (BLS) also offers worrying signs in regard to firms as well as questioning the alleged neutrality of the QT program.  It shows a further (admittedly

ECB Preview (Apr 17): Deeper Cuts on Trade Tariffs Broadening Impact

April 9, 2025 8:03 AM UTC

It is surely not a question of whether the ECB cuts rates again at its Apr 17 decision, but what it communicates about policy thereafter.  Not least given the manner in which financial conditions have tightened, the then-notable change in rhetoric last month to suggest the policy stance had become

ECB March Meeting Account – More Focus on Downside Risks than those on the Upside?

April 3, 2025 2:22 PM UTC

The Account of the Governing Council meeting on 5-6 March 2025 seemingly dwelt more on the downside risks posted by trade uncertainties than the upside risks posed by fiscal expansion plans across much of the EU.  It noted that not all members supported the proposal to lower the three key ECB inter

U.S. Tariffs - the EZ/EU Response?

April 3, 2025 10:24 AM UTC

The U.S is imposing a widespread tariff on the EU of 20%, higher and broader than expected, this based on U.S. calculation of an effective tariff rate of in effect 39 per cent, a figure the EU puts at about 1 per cent.  Moreover, rather than including factors such as VAT, and hygiene restrictions o

EZ Data Review: Headline Edges Lower Again With Friendlier Services and Labor Market Messages?

April 1, 2025 9:45 AM UTC

Largely as expected, there was more supportive news in the March flash HICP numbers (Figure 1), with the headline down a notch and core down 0.2 ppt (the former to 2.2% and hence the lowest since last autumn).  Perhaps more notably services inflation slowed more clearly, dropping 0.3 ppt to 3.4%, a

Continuum Economics Calendar April 2025

March 28, 2025 11:41 AM UTC

Data and Events Calendar April 2025.

German & EZ HICP Preview (Mar 31/Apr 1): Headline Edges Lower Again With Friendlier Services Messages?

March 25, 2025 1:43 PM UTC

February HICP inflation numbers did deliver better news and broadly and less marginally so after revisions with the headline dropping 0.2 ppt to an as-expected 2.3%.  This ended a run of three successive rises and came about despite a rise in food inflation.  Regardless, the core also eased 0.1 pp

Eurozone Outlook: At A Crossroads?

March 24, 2025 10:45 AM UTC

·       For once in a long while, we have upgraded the EZ activity forecast and for 2026 actually to a notch above consensus thinking. However, the current backdrop still suggests that while the economy has been growing afresh it is doing so timidly, with downside risks persisting more clearl

Uncertainty Over Pace and Scale of Extra European Defense Spending

March 18, 2025 9:05 AM UTC

·       The crucial date for more clarity is the June 24-26 NATO summit.  Donald Trump might attend but will ask for more spending.  NATO head Rutte’s desire is for above 3% of GDP for NATO countries, but the politics and budget suggest that a 2.5% minimum may only be agreed with Germany

Germany: Breakthrough in Attempt to Unlock Debt Brake?

March 14, 2025 12:08 PM UTC

It does seem as if effective German Chancellor-elect Merz now has enough parliamentary support to amend the so-called debt brake and unlock more spending and borrowing to be directed toward added defense and infrastructure.  Thus, it does seem as if Germany and its economy are undergoing a sea-chan

ECB Review: Disinflation Still On Track But Policy now ‘Work in Progress’

March 6, 2025 3:01 PM UTC

Unsurprisingly, the ECB verdict was less important that the rhetoric. A sixth 25 bp discount rate was widely expected – and delivered - to 2.5%, but how wide the door is left open for further cuts may be more opaque.  This both reflects gauging the extent of any lingering degree of policy restric

EZ Bilateral Trade Nuances with the U.S. – Its Imports Not Exports

March 5, 2025 12:56 PM UTC

As the EU/EZ prepares for an almost certain trade spat if not trade war with the U.S. as the latter levies well-flagged and probably significant tariffs, we consider what is actually behind President Trump’s ferocity regarding bilateral trade.  As has been suggested widely, the EZ does not actual