Policy makers are not doing their job properly in order to support the euro.
Mind the Gap between Soft and Hard Data.
Italy's economy has become a real problem and tackling the issues head-on will require a strong government, not one that may be forced into compromises.
With the energy bill having increased recently, the risk is that consumers will tighten their belts over Christmas. The euro-zone economy is still at risk of a disappointing Christmas.
That whole era is gone for good and not many people will regret its passing.
There is clearly a risk now that they might be bold enough to tighten policy in December, We think they will wait until March.
The debate may not have changed significantly the chances of victory of the two coalitions.
We believe that the long-awaited shift from soft to hard data is evidence of a recovery in euro zone private consumption has started, and will likely proceed gradually and modestly over the coming months, in line with the expected improvement in household real disposable income.
We don't see another rate rise, but we recognize that the risk is still there, due largely to oil prices -- the oil market remains vulnerable for both supply and demand reasons,
We don't see any change this year. Economic indicators seem to suggest there will be no change in interest rates in the short term.
At the margin, the change may be perceived as a small, dovish shift for the ECB governing council.
It would take a big global shock to change the prospects for at least modest growth in Europe.
To be fair with Schroeder, he tried and by European standards he did do more than other governments in the past few years. But the problems in Germany are more entrenched now.
The government was very reluctant to take a position because it's a very delicate situation, but now they are really turning the pressure on.
The monetary policy committee is still waiting for evidence on Christmas (retail) sales and wage negotiations. Then it will cushion the decline in the economy in a context of CPI (inflation) moderation.
Despite oil price tensions and strengthening domestic demand, the inflation performance remains subdued. Barring another oil spike, the headline rate is likely to ease further during the course of the year.
A March rate hike is a done deal.
Protectionism remains the major threat to global growth.
There are a number of countries that are increasingly uneasy about competitive pressures coming from Asia, and the softening of domestic industry.
With a long-term horizon it will certainly change the situation, not only in Japan but globally ... because reduced liquidity is available for purchase of financial assets.
This could provide a small additional backing to the idea that the euro zone economy is recovering and therefore might support an early hike,
In order to move interest rates higher, the ECB needs to be confident about the sustainability of the economic upswing, especially on the consumer side.
As January data are inflated by a growing tendency towards gift vouchers over Christmas, which are then turned into purchases afterwards, a return to normal in February is likely to show up in more subdued sales.
Services and probably consumer spending drove the increase in GDP. It makes a rate cut less likely for the moment.
They were very keen to start the process early, ... But once they start, they may not continue at a rapid rate.
It was much more balanced than the first debate which Berlusconi clearly lost. This time I think there was no clear winner and I'm sure both sides will claim victory.
The combination of high inflation and somewhat slower growth is certainly the worst thing for the euro,
The underlying trend is encouraging and will likely continue.
It's no surprise that the pressure is back on. At the end of the day, China allowed their currency to appreciate, but because they did so only marginally, there is disappointment elsewhere.
It's not that clear cut that intervention will have an impact, ... What appears to be driving down the euro are money flows out of the euro zone. If this is the case, it is not the optimal moment for currency intervention.
As always, protectionism doesn't work. The past resistance to change has resulted in the Italian banking system being still affected by fragmentation, with plenty of small-scale players.
It's a stellar performance, a very strong reading. It means a March rate hike is a done deal.
The probability of a February hike looks very small, but that of a tightening in March remains high in our view.
The main message here is that the recovery is becoming more fragmented. (But) we should not be misled by a few bad numbers. The conditions are in place for some recovery in the first part of this year.
The main reason for the euro rebound is the sharp slowdown in the U.S. economy, ... The European economy is slowing, but the deceleration is going to be much quicker and harder in the U.S.
