Discover and read the best of Twitter Threads about #EuroArea
Most recents (3)
Citibank 1/6: EU-US divergence - mind the gap(s)!
Citi analysts - #Europe is still struggling to recover from the Covid-19 pandemic, while the US is continuing to recover. Euro area real GDP has contracted by 0.7% QQ (-4.9% YY) in 4Q-20.
Citi analysts - #Europe is still struggling to recover from the Covid-19 pandemic, while the US is continuing to recover. Euro area real GDP has contracted by 0.7% QQ (-4.9% YY) in 4Q-20.
Citibank 2/6: Over the same period, US GDP has risen by 1.1% QQ (-2.4% YY). Citi analysts focus on 6 of the more salient aspects of the transatlantic divergence between the euro area & US & conclude the gap is unlikely to narrow any time soon & could even widen in the short-term.
Citibank 3/6: Transatlantic divergence - where are the gaps? – (1) Business Cycle — Euro area weakness is unlikely to end soon, with a challenging 2Q, perhaps extending into 3Q with narrowing only expected 12 months out; (2) Vaccinations — Europe lags US by 2 months.
Update of sectoral financial balances (flow of funds) in the #Euroarea (EA)
---Chart built on @ecb data - now including 2020 Q2---
*This time is different*
With the #COVID19 shutdown, households’ financial savings have been rising fast, as expected.
1/6
---Chart built on @ecb data - now including 2020 Q2---
*This time is different*
With the #COVID19 shutdown, households’ financial savings have been rising fast, as expected.
1/6
Before the virus tsunami hit, the balance of non-financial corporations had turned negative with rising capital spending.
It is now slightly positive, reflecting the net effect of lost revenue and a faster falling rate of investment.
2/6
It is now slightly positive, reflecting the net effect of lost revenue and a faster falling rate of investment.
2/6
With the EA current account surplus virtually unchanged, the increase in financial savings has been funded entirely by rising government deficits, with overall EA deficit/GDP ratio approaching 4% (and rising).
3/6
3/6
The #Global #Financial #Crisis of 2007/08 taught the policy making world that something special beyond #Conventional #MonetaryPolicy was necessary to lift economies out of the economic malaise...tinkering with the key rates was not enough anymore...
To this end, #centralbanks in the developed world (The US, UK, Japan, The EuroArea) adopted what they termed #UnconventionalMonetaryPolicy #UMP which is characterised by #ForwardGuidance #NegativeInterestRatePolicy & #QuantitativeEasing...but, have they helped?
