MUST READ: Mario Draghi, who is writing a report on how to revive the European economy at the request of Brussels, shares “the design and the philosophy” of his forthcoming report.
https://lnkd.in/emkyzQCN Source: Javier Blas
Mind the gap...
France debt to GDP ratio ihas been diverging in a meaningful way vs. Germany debt to GDP. Rating agency Fitch already cut country's credit rating from AA to AA- last year, rating agency S&P has placed France under review... Source: Bloomberg, HolgerZ
Eurozone inflation cools, setting stage for June rate cut:
Headline CPI slowed to 2.4% YoY in March from 2.6% in February below consensus forecast of 2.5%. Core CPI slowed to 2.9% from 3.1%, again below economists' expectations to reach lowest level in >2yrs. But there were signs that inflationary pressures have yet to ease in labor-intensive parts: Service Price inflation +4.0% YoY, unch from 4 preceding mths. (via DJ, Bloomberg thru HolgerZ).
German inflation slowed to 2.2% in March from 2.5% in February as expected but core CPI more sticky.
Core inflation slowed to 3.3% from 3.4% in Feb. Source: Bloomberg, HolgerZ
Below central bank holdings of government bonds...
Greece was excluded from ECB QE under Draghi, but was included in COVID QE, giving it a big boost (pink). Greece then undermined the G7 cap on Russia at every turn, protecting its shipping oligarchs at the expense of the EU. If you can't behave properly, there should be no QE... Source; Robin Brooks
The worst seems behind the economy.
This is indicated by the Ifo Business Climate Index, which has jumped to 87.8 in March, highest level since June 2023 vs 86.0 expected. Current conditions rose to 88.1 in March from 86.9 in Feb, Ifo business confidence to 87.8 from 85.7 in Feb. Suggests that we could see a recovery as households begin to spend their real income gains. Employment is robust and nominal wage growth comfortably exceeds inflation again. There could be some green shoots in the export sector, and even the deep slump in construction may have bottomed out. Source: Bloomberg, HolgerZ
European Stocks are on track for their 8th consecutive green week which would be their longest winning streak since 2022
source : barchart
Disinflationary forces continue in Germany.
Wholesales Prices drop 0.1% MoM in Feb after +0.1% MoM in Jan, plunge 3% YoY which is a good leading indicator for German food price CPI. Sources: Bloomberg, HolgerZ
