Western Europe Outlook: Easing Cycles Diverge?

June 24, 2024 7:48 AM UTC

·       ·       In the UK, while downside economic risks may have dissipated, the real economy backdrop and outlook is still no better than mixed.  This should accentuate a disinflation process hitherto driven mainly by friendlier supply conditions. The BoE will likely ease in Q3 and

SNB: 25bps Cut and Next Cut in September

June 20, 2024 8:34 AM UTC

The SNB cut by 25bps to try and stop inflation undershooting.  We look for a further 25bps cut in September, as the new inflation forecasts remains too far below target for SNB comfort. CHF strength will also not ebb quickly given the prospect of prolonged French political uncertainty.  

Western Europe Outlook: Easing Cycle Underway?

March 22, 2024 11:26 AM UTC

·        In the UK, downside economic risks may have dissipated but the tighter monetary stance has far from fully bitten. This accentuates and/or prolongs an already weak domestic backdrop into 2025 that will complement friendlier supply conditions in easing inflation. The BoE will likely e

Switzerland: SNB Surprise with 25bps Rate Cut

March 21, 2024 9:01 AM UTC

The SNB became the first DM central bank to cut rates with a 25bps reduction to 1.50%, which reflects an even larger forecast inflation undershoot and to counterbalance the strong Swiss Franc (CHF).  The inflation forecasts for 2024 and 2025 were significantly lowered even with the new 1.50% policy

SNB Preview: Preparing to Ease?

March 12, 2024 3:11 PM UTC

It is noteworthy that the SNB has already started to the reverse the policy course it initiated some two years ago, having dropped formally in December plans of further FX sales.  But now it is seemingly doing the opposite to a degree that is seeing its balance sheet re-expand. Moreover, having als

Markets: ECB/BOE/SNB Before the Fed?

February 14, 2024 11:35 AM UTC

Bottom Line:  We do see 25bps cuts arriving from the ECB/BOE and SNB and most likely these will all be in June.  Whether this is before the Fed will likely be a function of the Fed, as we see these interest rate moves as being driven by domestic fundamentals rather than the Fed being an influence.

Western Europe Outlook: Inflation Succumbing?

December 15, 2023 2:44 PM UTC

Our Forecasts
Risks to Our Views
Common Themes
There continue to be clear cross currents across Western Europe’s economies that may continue into 2024 and possibly beyond, all inter-related.  Firstly, while we have made little alteration to the 2024 outlooks for all four countries, they remain very

SNB Review: June 2024 Rate Cut?

December 14, 2023 9:16 AM UTC

Figure 1: SNB Inflation Projections     Source: SNBPeak SNB and Inflation Undershoot   The December SNB policy assessment points to a peak in the policy rates having already been achieved, which is really just a reinforcement of the conclusion after the forecast 2025 marginal inflation undersho

SNB Preview: Clearly Staying on Hold

December 6, 2023 11:39 AM UTC

Figure 1: SNB CPI Inflation Projections Back Below Target
Source: SNB
SNB Surprised in September With No Hike
The SNB surprised with no change in policy at its September assessment, despite widespread market expectations of a 25 bp hike to 2.0%. This reflected the inflation decline of previous mont

Western Europe Outlook: Policy Peaking

September 27, 2023 9:50 AM UTC

Our Forecasts
Source: Continuum Economics, Office for National Statistics, Eurostat, Swiss Secretariat for Economic Affairs, Statistics Norway
Risks to Our Views
Source: Continuum Economics
A Riskier Score for 2024
There a several common themes across Western Europe’s economies that are evident at pres

Western Europe Outlook: Consumer Fragilities Persist

June 22, 2023 12:48 PM UTC

Our Forecasts
Source: Continuum Economics, Office for National Statistics, Eurostat, Swiss Secretariat for Economic Affairs, Statistics Norway
Risks to Our Views
Source: Continuum Economics
Despite the drop in energy prices (which means that the threat of immediate recession has been reduced), it is not

Western Europe Outlook: Valedictory Hiking?

March 27, 2023 3:16 PM UTC

Our Forecasts
Source: Continuum Economics, Office for National Statistics, Eurostat, Swiss Secretariat for Economic Affairs, Statistics Norway
Risks to Our Views
Source: Continuum Economics
We still see fully-fledged recessions in all but Switzerland but they are now envisaged to be shallower and shorte

In-Depth Research: Quick Roadmap Central Bank Forecast/Rationale - February 2023

February 22, 2023 10:44 AM UTC

M/T Quick Roadmap – Fundamental MMKT/CB Roadmap and Rationale
February 2023
US FEDERAL RESERVE
The February 1 December FOMC meeting saw the pace of tightening slowed to 25bps. Inflation has slowed, but January's CPI details still show broad based inflationary pressures at a pace well above the Fed's