The FT's Beyond BRICS on Russia and the middle income trap http://t.co/jtNpWBc4On drawing on my work w/ Park & Shin http://t.co/NjWkRrnqvu
27 minutes ago
Roubini Topic Archive: Eurozone
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Policy Transmission Mechanism: Broken in Italy, Better in Spain
Yesterday, the Financial Times reported that borrowing costs for small businesses in the periphery were rising relative to the core using the ECB’s release of July MFI interest rate data. I highlighted this point exactly on August 1 following Draghi’s now famous London speech, where he cautioned that monetary transmission mechanism is ‘hampered’. As opposed [...]
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Dutch Domestic Demand Dragging Real Home Values
Today Statistics Netherlands (CBS) warned ”House Prices Nosedive“. Prices of existing owner-occupied dwellings sold in July 2012 were on average 8.0 percent down from July 2011. This is the most substantial price drop since the price index of existing residential property was first recorded in 1995. In real terms and indexed to 2005, home values are [...]
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It’s the Exchange Rate, Stupid
Eurostat released trade figures today, where the trade balance (exports less imports) surged €3.7 bn in the month of June (link to the .pdf release). The current figures imply a 2012 annualized trade balance of €66.9 bn, which is a meaningful boost to the -€7.4 bn deficit in 2011. Eurostat breaks down the regional figures further into intra-Euro [...]
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Euro Area Retail Sales Portend Negative Quarter of Real Consumption
Today Eurostat released its June estimate of real retail sales for the Euro area. On a month/month basis, real retail sales increased at a rate of 0.1%. However, on a trended basis, the 3-month/3-month average growth rate was down 0.7% in the three months ending in June. Given that the 3-month trended pace of contraction quickened [...]
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Evidence of Hampered Monetary Policy Transmission Channel in the Euro Area
Mario Draghi cautioned on the ‘hampered’ transmission channel of monetary policy in his now famous London speech last week: To the extent that the size of these sovereign premia hampers the functioning of the monetary policy transmission channel, they come within our mandate. I referred to the clogging of rates policy back in April via [...]
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Euro Area Crisis Hits Confidence in the Core
France’s INSEE business confidence, Germany’s Ifo business climate, and the National Bank of Belgium’s business survey demonstrate ongoing infection as the Euro area debt crisis hits business expectations in the core. Through July, business confidence in Germany and France continued to slide while that in Belgium rebounded, albeit from a low base. Of note, the [...]
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Euro Area Imbalances Are a Symptom of the Broader Global Imbalances
Every year I travel to Germany to visit my in-laws, which is where I am now. Given the extra time on my hands, I’ve now mulled over a June 2012 NY Times opinion piece by Gunnar Beck. Beck displays an interesting medley of data in support of his view that Germany cannot afford to backstop [...]
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Confidence Indicators Deteriorated Significantly This Week
This week national confidence surveys rolled in with just one story: the economic infection in Europe is spreading. Business confidence indicators in France and Germany declined 1.1% and 1.6%, respectively, in the month of June. In Italy consumer confidence hit another record low since 1996 of 85.3 after falling 1.4% in June. The National Bank [...]
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Euro Area Inflation: A Very Slow Burn
Euro area consumer prices increased at a 2.4% annual pace in May, down 0.2 ppt from the 2.6% pace in April. Core inflation fell to 1.8% in May from 1.9% in April. Headline and core inflation peaked in the fourth quarter of 2011, and disinflation is underway. Euro area price inflation is burning out but at a [...]
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Euro Area ‘Hard Data’ Catching Up with the ‘Soft Data’ – Industrial Production
Euro area industrial production (ex construction) declined 0.8% in the month of April. Across the major sectors, the largest decline occurred in capital goods; however, the trend in consumer and intermediate goods is worse than that of capital goods. The regional divergence is clear, as the two-month trend in industrial production – I use the [...]
