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Structural trends: a continuing story

I guess headline inflation won't be the ECB's main concern at next week's meeting... Friday's energy futures were some 20% below the ECB's March assumption

Who has time to look at a 146 page German coalition deal, when the global trade system is being blown up???

Am now waiting for an updated formula to arrive at the latest tariff decision

Remember that German fiscal sea change, bazooka or whatever you came up with? Today’s coalition deal contains commitment to strictly adhere to the eu fiscal rules. Curtails odds of sustained deficits of >3% or debt surging to anywhere close to what some worried about

Back in 2013 when I was in grad school, Tim Kehoe 🇺🇸🇨🇦🇲🇽🇺🇦, Kim Ruhl, and I wrote a paper on what would happen if US trade deficits were halted by a "sudden stop" like those that plagued emerging economies in the 1970s. The world didn't find that question very interesting at the time, so

Merz nannte gestern bei Miosga 2% Potenzialwachstum als erreichbar. Erinnert mich an Schol und seine versprochenen 400.000 Wohnungen oder den grünen Wirtschaftsboom.

Let me get this straight. Last week, EU was supposed to hike tariffs on China to avoid a flood of cheap goods. This week, ECB should hike rates, because of more expensive Playstations. Right?

If you like a more extreme chart making the same point... Irish exports to the US were up 210% y/y in February as reported today. Early reports point to a 40% gain for the eurozone as a whole. The 90-day tariff delay may possibly keep trade supportive through Q2 but thereafter...

Quite significant impact from early-Easter on tourism related CPI items. Excluding those, eurozone services inflation actually edged up in March on my calculation. A bounce this month is thus quite likely, although I doubt it will have any bearing on near-term policy moves.

The German stat office releasing a press release on 33 years of German trade surplus with the US shows an impressive political deftness I must say 😅

Was für ein Schwachsinn

does the eurozone now have to say thank you given that front running of US tariffs likely played a big role especially in Ireland?

I am not too excited about the jump in German factory orders in March. Alternative core measures show that the jump in core orders is driven by just a few sectors like pharma. And this data predates liberation day of course.

The jump in German industry turnover in March was similarly driven by just a few sectors and probably due to front-running of US tariffs as chemical/pharma turnover in non-EZ countries surged

Big surge in German IP in March. The 20% surge in pharma was likely due to US tariff front-running. But gains were broad-based. Easter in April may be another reason. Surveys/orders speak against this surge lasting. But scale of rise also in exports may trigger Q1 GDP revision?

The cut off date for ECB's June forecast update is likely this week. Energy futures signal a nice drag on headline CPI projections. I'd wager that EU tariff retaliation & supply disruptions will only feature as upside risks not in baseline. So f'casts will come down quite a bit.

Underlying services inflation in Germany likely continued to slow in May as the rise in services overall was driven by components that were lifted by the late Easter.

Who else thinks that Trump read about Germany's upwardly revised Q1 GDP resulting in an even wider growth gap to the US before putting the 50% tariff out?

Strong 1984 new speak vibes