Recent Blogs




Euro area economic outlook: Someway short of scintillating

  • Euro area economic growth remains steady not scintillating. And investors are becoming edgy about political risks.
  • So, while inflation has jumped well above expectations, the ECB’s QE programme is here to stay for a good while yet.

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Time for a change of heart at the ECB?

  • Economic sentiment in the euro area is reviving and inflation is on the rise.
  • So, having last month effectively pre-set policy for the coming year, might the ECB eventually have a change of heart?

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The euro area in 2017 - Business as usual?

  • The ECB’s latest policy changes have had the intended impact on financial markets, steepening the yield curve and weakening the euro, which should support ongoing steady economic recovery in the euro area.
  • While political risks are clear, we currently expect the euro area to avoid a major Brexit-like shock in 2017.  

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Will Renzi's referendum complicate Draghi's decision?

  • The market mood on Monday will be set by the outcome of Renzi’s referendum on constitutional reform, which risks a period of heightened political uncertainty in Italy.
  • Regardless of how those events pan out, on Thursday the ECB will announce an extension of QE and relax the rules of the purchase programme too.

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The euro area after Trump

  • While investors are pricing-in stronger US economic growth and inflation, the impact of Trump’s election victory on the euro area economy might be at best minimal and, quite possibly, harmful.

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