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Article / 01 June 2016 at 12:12 GMT

Daily Shot: Eurozone economic reports remain mixed Team / Saxo Bank
  • Good new on Eurozone joblessness, Italy excepted
  • Eurozone houseehold lending slow, corporate lending higher
  • Euro area broad money supply has already stalled 
  • Italian 2-year yield moves deeper into negative territory
  • European credit has been outperforming equities
  • Japanese labour shortages persist
By Walter Kurtz*

Once again we begin with the Eurozone where economic reports remain mixed.

The German unemployment rate hit another record low.

Ireland's unemployment rate is now below the level of autumn 2008.

Jobless numbers in France seem to have peaked. By the way, over time, French unemployment could decline substantially if President Hollande manages to push through the labour reforms.

On the other hand, Italian unemployment rate ticks up unexpectedly.


Euro area loan growth to households slowed while corporate lending growth is still gradually improving. A significant slowdown in private credit growth - which remains near historical lows - could derail the fragile recovery.

Growth in the euro-area broad money supply has already stalled (coming in below consensus).
money supply
Italian 2-yr yield moves deeper into negative territory. Amazing.


Greek shares are up almost 50% from the lows in February in response to the successful bailout process.

Athens line

Separately, European credit has been outperforming equities. Are European shares cheap or are credit spreads too tight in response to the ECB's planned corporate bond purchases?

Now on to the UK where retail deflation persists. The British Retail Consortium Shop Price Index (price changes in UK retail outlets) is shown below on a year-over-year basis.


Brexit risk is back on the table as the latest Guardian poll seems to show a lead for "leave".

Here is the FT's Brexit poll-average chart.

The British pound took a beating in response to the new Brexit poll.

Nonetheless, the betting markets still heavily favour "stay".

Anecdotally, businesses in Ireland, many of whom rely on trade with the UK, are extremely concerned about the referendum.

Overall, European sentiment has improved despite political uncertainty in the UK and Austria.

sent line
Turning to Japan, the nation's labour shortages persist.


Some suggest that the Bank of Japan's ETF purchase program could be expanded, potentially giving a boost to the Nikkei.

Speaking of Japanese equities, it seems that domestic institutions have been supporting the equity markets as foreigners exit.

— Edited by Clare MacCarthy

* Walter Kurtz is an alias

**This is an abridged version of the Daily Shot. To subscribe to the full version, link to the Daily Shot here. E-mail addresses are never shared with anyone.


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