Eco Week

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Economic Scenario

Economic scenario
01/15/2023 •

Outlook for GDP growth, inflation, interest rates and exchange rates

Calendars

Economic calendars
01/15/2023 •

The latest economic indicators updated on January 16, 2023 and the coming calendar

Eco Week 9 janvier 2023

Editorial

Eurozone: starting the year on an upbeat note
01/09/2023 •

The drop in gas prices, the decline in headline inflation and the improvement of survey data in December have created a feeling that for the Eurozone 2023 might be better than expected hitherto. The survey data bode well for the growth momentum at the turn of the year, which could create a favourable carry-over effect for GDP this year and some hope that lower inflation will mean fewer ECB rate hikes. However, caution is warranted. Inflation remains far too high and core inflation has moved higher in December. Moreover, survey data provide little or no information on the pace of growth beyond the first quarter of this year.

Economic Pulse

PMI: December data improve in the euro area
01/09/2023 •

The global manufacturing PMI edged down in December on the back of a new, significant decline in the US and for the second month in a row an increase in the euro area where the improvement is broadbased.

Economic Scenario

Economic scenario of 9 January 2023
01/09/2023 •

Outlook for GDP growth, inflation, interest rates and exchange rates

Calendars

Economic calendar of 9 January 2023
01/09/2023 •

The latest economic indicators updated on January 9 2023 and the coming calendar

Eco Week 2 janvier 2023

Editorial

2023: a year of transition, to what?
01/02/2023 •

2022 was a year of profound transformation, of shifting geopolitical and economic paradigms. Looking ahead, 2023 should see a change of direction in key economic variables. Headline inflation should decline significantly, central bank rates should reach their cyclical peak and the US and the euro area should spend part of the year in recession. 2023 can be considered as a year of transition, paving the way for more disinflation, gradual rate cuts and a soft recovery in 2024.

Economic Scenario

Economic scenario
01/02/2023 • By Christine PELTIER and Hélène BAUDCHON and Tarik RHARRAB and Stéphane COLLIAC

Outlook for GDP growth, inflation, interest rates and exchange rates

Calendars

Economic calendars
01/02/2023 •

The latest economic indicators updated on January 2 2023 and the coming calendar

Eco Week 20 décembre 2022

Editorial

ECB: tough talk and puzzling projections
12/18/2022 •

During the press conference following the latest governing council meeting, Christine Lagarde insisted repeatedly that moving to a 50 bp rate hike versus 75 bp previously did not represent a pivot, adding that rates still have to rise significantly and at a steady pace. Consequently, the likelihood of a terminal rate higher than 3.00% has increased, which explains the jump in bond yields. The large upward revision of the inflation projections is probably another factor behind the hawkish message. Forecasting inflation several years into the future is a difficult task, even more so in the current environment

Economic Pulse

Spain: a widespread easing of inflation in sight?

12/18/2022 • By Guillaume DERRIEN

In its second estimate, the Spanish statistical institute (INE) raised slightly the harmonised inflation rate (HICP) for November from 6.6% y/y to 6.7% y/y. This is still a significant decline from the 10.7% y/y figure reported in July, as Spain now reports the smallest rate of inflation in the Eurozone.

Economic Pulse

Japan: consumer confidence plunges, the Tankan edges higher
12/18/2022 • By Guillaume DERRIEN

Confidence amongst Japanese consumers fell sharply this autumn, reflecting the difficulties they are experiencing in the face of inflation rising to its highest level for more than thirty years (3.8% y/y in October). According to the Cabinet Office, consumer confidence has fallen back to its level from the summer of 2020, when the pandemic was in full swing.

Economic Pulse

United Kingdom: Peak inflation?
12/18/2022 •

UK inflation finally fell in November to +10.7% y/y (+0.4% m/m), compared with +11.1% in October (+2% m/m). Other good news is that core inflation is also falling, for the first time since September 2021 (-0.2 points, i.e. 6.3% y/y). In the face of still very high inflation, however, the Bank of England (BoE) Monetary Policy Committee (MPC) decided to raise its key rate further by 50 basis points, thus bringing it to 3.5%. The rise is less significant than in November (+75 bp) as the BoE must also reconcile it with the risk of recession.

Economic Pulse

Covid-19: ninth wave of the pandemic
12/18/2022 • By Tarik RHARRAB

3.9 million new cases were counted between 7 and 13 December, compared with approximately 3.6 million the previous week, representing an increase of 8.3%. This is the fifth consecutive week of rising infections, a development that is all the more noteworthy as all regions reported an increase in weekly cases, with the exception of Africa, which reported a fall of 17%.

Eco Week 12 décembre 2022

Editorial

European Union: Will the energy transition cause an increase in interest rates?
12/12/2022 •

Meeting the European Union’s climate-related and digital ambitions will require a huge additional annual investment effort. In the near term, against a background of slowing growth and the prospect of a recession in 2023, this represents a potential source of resilience. In the medium term, this demand impulse may underpin or even increase inflation, in addition to other factors that could lead to greenflation. This would influence the level of official interest rates as well as long-term interest rates. The latter could also be under upward pressure due to the huge additional financing needs compared to the normal financing flows. The financing mix -banks versus capital markets- plays a key role in this respect.

Economic Pulse

Germany: difficult times ahead
12/12/2022 •

The economic landscape is not improving much in Germany. November’s economic surveys confirm that the German economy is not just facing a slower pace of growth, but is indeed getting bogged down. Although the country’s composite PMI was up slightly (46.3 from 45.1), it remained at a very low level, well below the theoretical threshold for expansion. On the other hand, activity in services, which had been a key driver for growth in the third quarter, fell significantly with a PMI published at 46.1 in November, down for the fifth consecutive month.

Economic Pulse

France: Decline in activity indicators in October
12/12/2022 • By Stéphane COLLIAC

The first indicators available for October, both for household consumption and for industrial production, suggest that GDP growth would have entered into negative territory at the start of the fourth quarter. Our scenario is based on -0.3% q/q. Household consumption fell 2.8% m/m in October, penalised by the acceleration of inflation, particularly in food. This negative effect was compounded by the impact of fuel shortages, which reduced the presence of consumers in shopping centres in the middle of the month. Finally, two-thirds of the very sharp drop in energy consumption (energy, water and waste items) of 10

Economic Pulse

Italy: No respite for inflation
12/12/2022 • By Guillaume DERRIEN

The latest European Commission surveys indicated an encouraging upturn in Italian households' confidence, which nevertheless remains very low. The confidence index improved by 8 points in November, the strongest monthly increase recorded by the survey since its inception in 1985. Consumers’ anticipations on inflation were less negative (the second biggest monthly drop since 1985) and clearly supported this renewed optimism.

Markets Overview

Market Overview of December 12, 2022
12/12/2022 •

The markets overview updated on the December 12, 2022: Money & bond markets, exchange rates, commodities, equity indices, performances, and much more.

Economic Scenario

Economic scenario
12/12/2022 • By Christine PELTIER and Hélène BAUDCHON and Tarik RHARRAB and Stéphane COLLIAC

An update of the GDP Growth and inflation data, interest and exchange rates

Eco Week 5 décembre 2022

Editorial

Labour hoarding: a source of resilience during a recession
12/05/2022 •

Companies in the United States and the euro area continue to struggle to fill vacancies. This will probably make them reluctant to lay off staff when economic conditions worsen, fearing that during the next upturn they would rapidly face new hiring difficulties. By limiting the increase in unemployment, such labour hoarding would be a source of resilience. However, this would be reflected in a decline in labour productivity, which would weigh on profits and could push companies to increase selling prices, thereby slowing the pace of disinflation.

Economic Pulse

PMI: upstream tensions in the production chain are easing
12/05/2022 •

The manufacturing PMI shows a contrasting picture in November, with another significant drop in the US and a rebound, from a low level, in the euro area. France, Germany, Greece, Italy and Spain recorded an improvement but the index declined in the Netherlands. Brazil saw an exceptional drop so next month’s data will be key to see whether this was a one-off. Also noteworthy is the drop in Vietnam from 50.6 to 47.4. New orders dropped again in the US although the index remains above that in the euro area, where it has rebounded. France, Germany and Italy benefited from a particularly strong increase, but the levels remain very low and well below the 50 mark. The situation worsened in Japan and Vietnam and even more so in Brazil. India saw an improvement from an already high level.

Economic Pulse

United States: Will US GDP grow in Q4?
12/05/2022 •

According to the latest estimate by the Atlanta Federal Reserve (GDPnow) on 1st December, quarterly annualised growth in US GDP could be 2.8% in Q4 2022, which would be hardly different from the Q3 performance (+2.9% q/q), but well above the first two quarters (-1.6% in Q1 and -0.6% in Q2). This latest estimate strengthens the idea that the US economy is resilient and is not expected to enter a recession in 2022.

Economic Pulse

Eurozone: November’s pleasant surprises
12/05/2022 • By Hélène BAUDCHON

Following in the footsteps of the US inflation figures for October, Eurozone inflation also surprised favourably by coming in below estimates. Eurostat’s flash estimate of an annual rate of 10% in November was lower than the consensus figure of 10.4%. This raises hopes that Eurozone inflation has finally peaked, and indeed this looks likely. It is our scenario, but considerable uncertainty remains and caution is required.

Economic Pulse

New Covid-19 cases: the disease is still on the rise in Asia
12/05/2022 • By Tarik RHARRAB

The number of new Covid-19 cases continues to increase across the world for the third consecutive week. 3.2 million new infections were recorded between 24 and 30 November, up 10% on the previous week. This rise was seen across all regions, with the exception of North America, where the number of cases fell by 12%.

EcoWeek, the weekly Economic Research round-up, looks back on the economic and financial news of the past week.

In his editorial, the Chief Economist analyses a decision, event or trend, with the help of graphs. Topics covered include the monetary policy decisions of the main central banks, in particular their interest rate trends and decisions (monetary tightening, quantitative easing), the evolution of bond yields (in particular the German Bund, the euro zone reference rate and the United States Treasury), the main budgetary policy choices of developed (OECD) or emerging (China, India, Brazil and Russia, in particular) economies and their immediate and future effects on the countries’ economies, global trade and financial market psychology, etc.

The Barometer section provides a summary of the main economic indicators of a country or zone (United States, euro zone, France, Germany, United Kingdom, etc.), of global trade (e.g. volumes and new export orders, strains on value chains, Baltic Exchange Dry Index, freight rate, delivery times), of credit momentum in the euro zone (according to the European Central Bank’s lending survey), or uncertainty indicators (e.g. media coverage, dispersion indices, geopolitical risk index).

The Calendar section highlights the important dates of the coming week (expected economic data, central bank meetings, press conferences, publications, etc.) and the same updated data from the previous week.

In addition, EcoWeek provides a Market Review (money and bond markets, interest rates, currencies, commodities, performance by sector, oil prices, etc.), as well as an update of the economic scenarios for the United States, China, the euro zone and France. Lastly, economists provide regular commentary on forecasts for interest and exchange rates, as well as growth and inflation in several countries.