Monday , August 19 2019
Home / SNB & CHF / DATA ADDS TO THE CASE FOR ECB ACTION IN SEPTEMBER

DATA ADDS TO THE CASE FOR ECB ACTION IN SEPTEMBER

Summary:
Slowing economic momentum in the euro area means that we are lowering our GDP forecasts for this year. The euro area economy grew by 0.2% q-o-q in Q2, down from 0.4% in Q1. While 0.2% is still a decent pace of growth, concerns about the economy in the second half of the year have increased. Recent data have shown that the industrial slump has started to leave some marks on the domestic economy. Tentative signs of weakening domestic demand, the possibility of a hard Brexit, potential US tariffs on EU cars, the ongoing trade frictions between the US and China as well as the slow rotation of the Chinese economy are all factors that make us cautious about economic prospects in H2. As a result, we have revised down our

Topics:
Nadia Gharbi considers the following as important: , , , , ,

This could be interesting, too:

Swissinfo writes Swiss groundwater quality threatened by pollution

Jeffrey P. Snider writes Some Brief European Leftovers

Anil Panchal writes USD/CHF technical analysis: Heads to 0.9800/05 supply-zone amid bullish MACD

Nadia Gharbi writes Italy: Back to polls in Q4 2019?

Slowing economic momentum in the euro area means that we are lowering our GDP forecasts for this year.

The euro area economy grew by 0.2% q-o-q in Q2, down from 0.4% in Q1.

While 0.2% is still a decent pace of growth, concerns about the economy in the second half of the year have increased. Recent data have shown that the industrial slump has started to leave some marks on the domestic economy.

Tentative signs of weakening domestic demand, the possibility of a hard Brexit, potential US tariffs on EU cars, the ongoing trade frictions between the US and China as well as the slow rotation of the Chinese economy are all factors that make us cautious about economic prospects in H2. As a result, we have revised down our 2019 GDP growth forecasts for the euro area to 1.1% from 1.4%.

Euro Area Real GDP Growth, 2013-2019

DATA ADDS TO THE CASE FOR ECB ACTION IN SEPTEMBER

- Click to enlarge

The ECB did not deliver policy action last week but it did prepare the ground for a rate cut in September and left open the possibility of additional monetary easing measures going forward. Recent data add to the case for an easing package in September. We believe this will take the form of a 10bp deposit rate cut (along with tiering) as well as the launch of a new asset purchase programme.


Tags: ,,,
Nadia Gharbi
Nadia Gharbi is economist at Pictet Wealth Management. She graduates in Université de Genève, Les Acacias, Canton of Geneva, Switzerland Do not hesitate to contact Pictet for an investment proposal. Do not hesitate to contact Pictet for an investment proposal. Please contact Zurich Office, the Geneva Office or one of 26 other offices world-wide.

Leave a Reply

Your email address will not be published. Required fields are marked *