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Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
EUROZONE
Q1 euro area GDP rose 0.3% q/q, the strongest quarter since Q3 2022, and the technical recession in H2 2023 was revised away with now only Q4 posting a small negative. We are now past the time that our probability indicator signaled the chance of a recession was above 50%. The June update is suggesting little chance of a prolonged contraction around the turn of the year.
- The 6-month ahead recession probability indicator estimated since 1985 has been at zero since the end of last year. Real rates, REER and real equity prices, whereas real oil prices and economic sentiment have put upward pressure on the probability.
- Our estimation from 1998, and so includes 3 recessions rather than 4, has had the probability of a recession 6-months ahead at around 30% for the last seven months but that is lower than where it was through H2 2023 and remains below the key 50% level. While a recession is currently improbable, growth is likely to remain soft encouraging further ECB easing. Oil prices and economic sentiment have boosted this estimate.
- It is worth noting that econometric calculations are just estimates and not projections.
Euro area 6-month ahead recession probability estimates
MNI - Market News/Refinitiv
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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