Archive

April 16, 2021
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EA: inflation rising with a soggy bottom

  • EA HICP inflation for Mar-21 was confirmed at 1.3% y-o-y while the ex-tobacco index was marginally weaker than expected at 106.09 (Heteronomics: 106.12) for 1.26% y-o-y. Clothing was softer with transport and housing offsetting, mostly owing to Italy changes.
  • The headline rate is set to rise further from base effects over the next two months before slumping in July. A likely rise above target in the Autumn should be fleeting as underlying inflation provides a soggy bottom rather than a firm foundation.

April 14, 2021
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EU: Waiting in the wings for Hamilton

  • The current Covid19 crisis is an opportunity for the EU to force the door open a little further towards sharing debt - the Hamiltonian moment.
  • However, the attitude of any new German administration to further fiscal entanglement with southern Europe is unclear. We believe the doom loop has yet to be extinguished.

March 31, 2021
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EA: HICP rises without IT in Mar-21

  • Flash HICP inflation rebounded by 40bps to 1.3% in Mar-21. That outcome was 14bps less than we expected, mostly caused by Italy and France to a lesser extent, while Spain provided a partial positive offset. Our forecast is now 0.1pp lower for the year ahead.