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78f6c72b509229f3ef77a71224b9fc6b147da4ee04fe56b12377231eaa21e01d;;[{"layout":"detailed","uid":27588,"publicationDate":"30 Mar 22","emaObject":{"protectedFileLink":"https:\/\/www.research.unicredit.eu\/DocsKey\/economics_docs_2022_182906.ashx?EXT=pdf&KEY=C814QI31EjqIm_1zIJDBJJW4PBk9_ILJawJy3UT8KTA=&T=1&T=1","protectedFileLinkDe":"","protectedFileLinkIt":""},"title":"Economics Chartbook - Central banks walk a thin line (2Q22) ","titleDe":"","titleIt":"","product":"The Unicredit Economics Chartbook","synopsis":"<ul class=\"ucrBullets\"><li><strong> Global: <\/strong> The economic outlook has worsened. We see global GDP growth of 3.3% this year (from 4.2%) and 3.4% next year (from 3.7%). The Russia-Ukraine crisis has caused a sharp rise in commodities prices and inflationary pressure, further global supply-chain disruption, a tightening of financial conditions, heightened uncertainty and a sharp drop in consumer confidence. Rising COVID-19 cases, notably in China, pose additional risks. Global central banks will walk a thin line as the growth-inflation trade-off deteriorates.<\/li><li><strong> US: <\/strong> We expect GDP growth of 3.0% this year and 2.2% next year, which includes a cumulative 0.3pp reduction in growth due to the Russia-Ukraine crisis. US trade and financial linkages with Russia and Ukraine are relatively small and the US economy entered the crisis in a good place, with strong household balance sheets and a very tight labor market. After likely peaking at about 8.5% yoy in the coming months, we see headline CPI inflation declining to moderately above 2% in 2023 due to base effects, lower energy prices, demand moderation and some improvement in supply bottlenecks. We now expect the Fed to hike by 125bp in the remainder of this year, up from 100bp previously, but still see the peak for the federal funds rate at 2-2.25% next year.<\/li><li><strong> Eurozone: <\/strong> Assuming that Russia continues to export oil and gas to Europe, we forecast GDP in the eurozone to expand by 3.1% this year and 2.5% in 2023. This growth trajectory is about 1pp lower than before the Russia-Ukraine conflict started. An easing of pandemic restrictions, still large amounts of excess savings for households and targeted fiscal stimulus are important mitigating factors. Our inflation forecast for 2022 has surged to close to 7%, followed by a decline to an average rate of about 2% in 2023. Facing a worsened trade-off between lower growth and higher inflation, the ECB confirmed its hawkish pivot and announced a plan to speed up the reduction of net asset purchases in 2Q22, aiming to end QE in 3Q22. We still expect two 25bp hikes in 1H23, although risks have shifted toward a first move taking place already before year-end.<\/li><li><strong> CEE: <\/strong> We expect the Russian economy to shrink by around 12% this year (peak-to-trough of around 20%), with a muted rebound in 2023 akin to stagnation. In EU-CEE and in the Western Balkans, GDP is expected to grow by around 2.3% in 2022 and by 3.6% in 2023. For this group, we estimate the direct impact of the conflict on GDP growth at 1.5-3pp in 2022 and up to 1.5pp in 2023. Turkey could grow by around 4% this year and 3.8% in 2023. If the EU stops importing oil and gas from Russia, the Russian economy could shrink by around 20% this year and fail to rebound in 2023. In such a scenario, EU-CEE and the Western Balkans would probably fall into recession. Inflation could reach 30-year highs due to rapidly rising commodity prices and supply-chain bottlenecks, prompting additional rate hikes and FX interventions.<\/li><li><strong> UK: <\/strong> We forecast GDP growth of 3.4% this year and 1.8% next year, after revising down growth by a cumulative 0.6pp due to the Russia-Ukraine crisis. The UK imports little from Russia but, as a net importer of commodities, it faces a substantial terms-of-trade shock. Inflation will likely peak at about 8.5% yoy in April and stay high through 3Q23 before falling below 2% in 4Q23. The MPC will likely raise the bank rate to 1.25% by August and then stop.<\/li><li><strong> China: <\/strong> We expect GDP to grow 4.7% in both 2022 and 2023. New outbreaks of COVID-19 that are forcing millions of Chinese into new lockdowns will likely weigh on economic performance in 1H22, adding to headwinds from the Russia-Ukraine conflict, rising commodity prices and real estate vulnerabilities. However, the government has signaled it will deploy further policy support to ensure stable economic performance and mitigate domestic and external growth headwinds. An easing in fiscal and monetary policy is likely.<\/li><\/ul>","synopsisDe":"","synopsisIt":"","hash":"78f6c72b509229f3ef77a71224b9fc6b147da4ee04fe56b12377231eaa21e01d","available":"0","settings":{"layout":"detailed","size":"default","showanalysts":"2","showcompanies":"2","showcountries":"2","showcurrencies":"2","nodate":"0","notitle":"0","noproduct":"0","noflags":"0","dateformat":"d M y","nolinktitle":"0","synopsislength":"300","synopsisexpand":"1","shownav":"0","oldestedition":"","limit":"5"}},{"layout":"detailed","uid":27117,"publicationDate":"30 Jan 22","emaObject":{"protectedFileLink":"https:\/\/www.research.unicredit.eu\/DocsKey\/economics_docs_2022_182285.ashx?EXT=pdf&KEY=C814QI31EjqIm_1zIJDBJARrg0KZdE9OVbRQFZum4fs=&T=1&T=1","protectedFileLinkDe":"https:\/\/www.research.unicredit.eu\/DocsKey\/economics_docs_2022_182285.ashx?EXT=pdf&KEY=C814QI31EjqIm_1zIJDBJARrg0KZdE9OVbRQFZum4fs=&T=1&T=1","protectedFileLinkIt":"https:\/\/www.research.unicredit.eu\/DocsKey\/economics_docs_2022_182285.ashx?EXT=pdf&KEY=C814QI31EjqIm_1zIJDBJARrg0KZdE9OVbRQFZum4fs=&T=1&T=1"},"title":"Sunday Wrap","titleDe":"Sunday Wrap: Kurzzusammenfassung","titleIt":"Sunday Wrap: Breve riassunto","product":"Sunday Wrap","synopsis":"<p><ul class=\"ucrBullets\"><li> The characteristics of the recent market moves, and what it tells us.<\/p><\/li><\/ul><p><ul class=\"ucrBullets\"><li> Why the Fed is likely to tighten more than is priced in, but not enough to kill markets.<\/p><\/li><\/ul><p><ul class=\"ucrBullets\"><li> Short of being able to guess Putin\u00b4s next move, I\u00b4ll highlight one clear miscalculation he has made, namely his attempt to further split the West (while forcing his new friends in the US Republican Party to confront a newfound dilemma). Could that contribute to a decision to back down'<\/p><\/li><\/ul>","synopsisDe":"<p class=\"ucrIndent\"><p class=\"MIBEditorial\"><em>Publikation nur auf Englisch verf\u00fcgbar<\/em><\/p><\/p><p class=\"MIBEditorial\"><ul class=\"ucrBullets\"><li> Die Besonderheiten der j\u00fcngsten Marktbewegungen und was wir daraus ableiten k\u00f6nnen.<\/p><\/li><\/ul><p class=\"MIBEditorial\"><ul class=\"ucrBullets\"><li> Warum die Fed wahrscheinlich st\u00e4rker straffen wird als eingepreist ist, aber nicht genug, um die M\u00e4rkte abzuw\u00fcrgen.<\/p><\/li><\/ul><p class=\"MIBEditorial\"><ul class=\"ucrBullets\"><li> Ohne Putins n\u00e4chsten Schritt vorhersehen zu k\u00f6nnen, m\u00f6chte ich auf eine klare Fehleinsch\u00e4tzung hinweisen, die er getroffen hat, n\u00e4mlich sein Versuch, den Westen weiter zu spalten (w\u00e4hrend er seine neuen Freunde in der amerikanischen Republikanischen Partei zwingt, sich einem neuen Dilemma zu stellen). K\u00f6nnte dies zu einer Entscheidung zugunsten eines R\u00fcckziehers beitragen'<\/p><\/li><\/ul><p class=\"ucrIndent\"><p class=\"MIBEditorial\"> <\/p><\/p>","synopsisIt":"<p class=\"ucrIndent\"><p class=\"MIBEditorial\"><em>Pubblicazione disponibile solo in inglese<\/em><\/p><\/p><p class=\"MIBEditorial\"><ul class=\"ucrBullets\"><li> Le caratteristiche dei recenti movimenti di mercato, e cosa ci dicono.<\/p><\/li><\/ul><p class=\"MIBEditorial\"><ul class=\"ucrBullets\"><li> Perch\u00e9 la Fed probabilmente attuer\u00e0 una stretta pi\u00f9 forte di quanto scontino i mercati, ma non tale da ucciderli.<\/p><\/li><\/ul><p class=\"MIBEditorial\"><ul class=\"ucrBullets\"><li> Non potendo indovinare la prossima mossa di Putin, evidenzier\u00f2 un chiaro errore di calcolo che ha fatto, vale a dire il suo tentativo di dividere ulteriormente l'Occidente (costringendo al contempo i suoi nuovi amici nel partito repubblicano statunitense ad affrontare un nuovo dilemma). Questo potrebbe contribuire alla decisione di fare marcia indietro'<\/p><\/li><\/ul>","analysts":[{"first":"Marco","last":"Valli","link":"https:\/\/www.unicreditresearch.eu\/index.php?id=analyst&tx_research_piedition%5Banalyst%5D=37&tx_research_piedition%5Baction%5D=analyst&tx_research_piedition%5Bcontroller%5D=Edition&cHash=dc3604fb61baa8c1a3f2aed1d2468de2"}]},{"layout":"detailed","uid":26840,"publicationDate":"10 Dec 21","emaObject":{"protectedFileLink":"https:\/\/www.research.unicredit.eu\/DocsKey\/economics_docs_2021_181953.ashx?EXT=pdf&KEY=C814QI31EjqIm_1zIJDBJB6dDKN-ZlwQwmzPU8IXdJ8=&T=1","protectedFileLinkDe":"https:\/\/www.research.unicredit.eu\/DocsKey\/economics_docs_2021_182038.ashx?EXT=pdf&KEY=C814QI31EjqIm_1zIJDBJBcmVMUvH8DWSidpqkZAj_U=&T=1&T=1","protectedFileLinkIt":""},"title":"UniCredit Macro & Markets - 2022-23 Outlook: A bumpy road towards normalization","titleDe":"","titleIt":"","product":"Macro & Markets","synopsis":"<p><ul class=\"ucrBullets\"><li><strong>Macro: <\/strong> We are lowering our global GDP growth forecast for 2022 to 4.2%, as supply bottlenecks and higher inflation last for longer than anticipated. The US will likely recover its pre-pandemic GDP trend by 4Q22, while the eurozone might get there a year later. Monetary policy will gradually normalize. We expect the Fed to hike rates twice next year and three times in 2023. The ECB\u2019s QE will likely continue at a slower pace into 2023, with no change in policy rates.<\/p><\/li><\/ul><p><ul class=\"ucrBullets\"><li><strong>FI: <\/strong> UST yields are likely to drift upwards accompanied by a long-lasting bear-flattening trend. Bund yields should remain low, with the yield curve showing a modest bear-steepening as ECB purchases gradually decline. Pulled by diverging forces, the 10Y BTP-Bund spread will probably trade around 125bp.<\/p><\/li><\/ul><p><ul class=\"ucrBullets\"><li><strong>FX: <\/strong> Interest-rate differentials are set to remain the major driver of FX. In G10, we like the USD, GBP, NOK and the commodity currencies against the EUR, JPY, CHF and SEK. New COVID-19 developments may add volatility but are unlikely to prevent EUR-USD from dropping to 1.10 and below.<\/p><\/li><\/ul><p><ul class=\"ucrBullets\"><li><strong>Equities: <\/strong> European equities have the potential to grow by about 10% in 2022, mainly supported by solid earnings growth, while volatility may remain elevated over the next few months, as uncertainty surrounding COVID-19, high inflation rates and the policy response of central banks is likely to persist.<\/p><\/li><\/ul><p><ul class=\"ucrBullets\"><li><strong>Credit: <\/strong> We expect European corporate credit spreads will tighten by the end of 2022. Rising inflation, higher yields, supply-chain frictions and pandemic developments are the main challenges but their impact on performance is expected to be contained by supportive technical factors.<\/p><\/li><\/ul>","synopsisDe":"","synopsisIt":""},{"layout":"detailed","uid":26734,"publicationDate":"26 Nov 21","emaObject":{"protectedFileLink":"https:\/\/www.research.unicredit.eu\/DocsKey\/economics_docs_2021_181821.ashx?EXT=pdf&KEY=C814QI31EjqIm_1zIJDBJH3YumI0qiwD5adt_m9vZ3k=&T=1&T=1","protectedFileLinkDe":"","protectedFileLinkIt":""},"title":"Chart of the Week - German households spared from surging gas and electricity bills...for now","titleDe":"","titleIt":"","product":"Chart of the Week","synopsis":"<ul class=\"ucrBullets\"><li> In its latest monthly report, the Bundesbank forecasts that Germany\u00b4s HICP inflation might reach just under 6% yoy in November (just above 5.5% yoy on the CPI gauge). The preliminary data will be published on Monday. The Bundesbank also expects the inflation rate to decline perceptibly over the course of 2022, although 'the bulk of the major increases in market prices for natural gas will probably only be passed on to consumers after the turn of the year'. <\/li><li> Our Chart of the Week shows that retail prices for natural gas and electricity have remained sticky in Germany despite skyrocketing gas prices in the market. Compared to before the pandemic (we take February 2020 as our reference), Dutch TTF gas prices have recorded a ten-fold rise, while prices for German consumers have barely increased. Germany stands out among its European peers, which have recorded much larger increases in either gas or electricity prices, or both.<\/li><li> At a country level, dynamics in retail prices for energy reflect a complex mix of demand and supply factors. They include the national energy mix, network costs, import diversification, costs for environmental protection, levels of taxation and weather conditions. Lately, government measures to ease the burden on households have played an increasingly important role, for example in countries such as France, Italy and Spain. German consumers have been spared from surging gas and electricity bills until now, largely due to comparatively sticky contractual agreements at the retail level. However, as current contracts expire, higher wholesale gas prices will be passed on to households to a more meaningful extent.<\/li><\/ul>","synopsisDe":"","synopsisIt":"","analysts":[{"first":"Marco","last":"Valli","link":"https:\/\/www.unicreditresearch.eu\/index.php?id=analyst&tx_research_piedition%5Banalyst%5D=37&tx_research_piedition%5Baction%5D=analyst&tx_research_piedition%5Bcontroller%5D=Edition&cHash=dc3604fb61baa8c1a3f2aed1d2468de2"}],"countries":[{"name":"Germany","ticker":"DE","link":"https:\/\/www.unicreditresearch.eu\/index.php?id=country&tx_research_piedition%5Bcountry%5D=9&tx_research_piedition%5Baction%5D=country&tx_research_piedition%5Bcontroller%5D=Edition&cHash=b98f1916ef68c367defade63b875243d"}]},{"layout":"detailed","uid":26246,"publicationDate":"28 Sep 21","emaObject":{"protectedFileLink":"https:\/\/www.research.unicredit.eu\/DocsKey\/economics_docs_2021_181231.ashx?EXT=pdf&KEY=C814QI31EjqIm_1zIJDBJONVgIeo7x-ZU6taDmKjrKk=&T=1&T=1","protectedFileLinkDe":"","protectedFileLinkIt":""},"title":"Economics Chartbook - Central banks head for exit (4Q21)","titleDe":"","titleIt":"","product":"The Unicredit Economics Chartbook","synopsis":"<ul class=\"ucrBullets\"><li><strong> Global: <\/strong> Growth has peaked, and we are fine-tuning our global GDP growth forecast for this year, to 5.8% from 6%, and for next year, to 4.6% from 4.7%. The spread of the Delta variant has weighed on demand over the summer, while shortages of materials and labor continue to constrain supply and will probably last into 2022. Growth is likely to remain robust next year, thanks to accumulated household savings, inventory restocking, and the declining economic effects of each new wave of COVID-19. However, growth rates will naturally ease as pent-up demand, fiscal support and spare capacity fade. Inflation will likely remain high through year-end before moderating as base effects turn negative and supply starts to adjust. Central banks will continue to chart a gradual exit from emergency measures.<\/li><li><strong> US: <\/strong> We now expect GDP growth of 5.8% this year (from 6.1%) while our forecast for next year is 3.9% (from 3.8%). This is the result of a downward revision to growth in 3Q21 and slightly stronger growth early next year. GDP is likely to reach its pre-pandemic trend line in 1Q22, a quarter later than previously expected. Inflation is close to peaking but will likely remain elevated well into next year as supply disruption looks set to last longer than anticipated. We continue to see inflation falling back towards 2% by end-2022. The Fed will likely start tapering its QE in November and cease net purchases around mid-2022. We expect the first rate hike in early 2023, followed by a second hike in 2H23.<\/li><li><strong> Eurozone: <\/strong> GDP is likely to expand by 5% this year and by 4.3% in 2022. Activity is set to increase strongly again in 3Q21, followed by slower growth at the turn of the year as the reopening boost fades and manufacturing output slows. GDP will probably recover to its pre-pandemic level by year-end. Prospects for 2022 remain positive, supported by deployment of NGEU funds, but activity is unlikely to return to its pre-crisis trend before 2023. Inflation will probably peak in November at close to 4%, before falling sharply over the course of next year. The ECB seems keen to close the PEPP in March. If so, maintaining easy financing conditions and a smooth transmission of monetary policy would require stepping up the pace of the APP and increasing its flexibility.<\/li><li><strong> CEE: <\/strong> We expect economies in EU-CEE and in the Western Balkans to grow by around 6% in 2021 and 4.6% in 2022. Turkey\u00b4s economy could expand by 9.7% in 2021 and 5.5% in 2022. In Russia, GDP growth could slow from 4% in 2021 to 2.4% in 2022. In 2021, the recovery has been driven by pent-up consumer demand\u00a0and exports. In 2022, investment could contribute more to growth, helped in EU-CEE by NGEU disbursements, in Russia by spending from the National Wealth Fund and in Turkey by easier financial conditions. Supply-chain bottlenecks, rising energy prices and buoyant consumer demand could keep inflation outside target ranges for longer than central banks currently expect. Further monetary tightening is needed to ensure price stability.<\/li><li><strong> UK: <\/strong> We are lowering our GDP growth forecasts to 6.4% for this year (from 6.7%) and 5.9% next year (from 6.1%), delaying the time when we expect GDP to surpass its pre-pandemic level by one quarter to 2Q22. Inflation is set to rise to almost 4% in 4Q21 and remain there through 2Q22, before falling back to close to 2% by end-2022. The MPC seems prepared to raise rates as soon as February, but we expect lower growth and higher unemployment to delay a hike until late 2022\/early 2023.<\/li><li><strong> China: <\/strong> We are reducing our GDP growth forecast for 2021 to 8.2% from 8.5%, and for 2022 to 5.0% from 5.7%. The summer turned out to be challenging due to a mix of natural disasters and the spread of the Delta variant. Looking beyond 3Q21, there are several headwinds that might dent the economic outlook, from abrupt state interventionism to rising vulnerabilities in the real estate sector and an economically-damaging 'zero tolerance' approach to COVID-19. Fiscal and monetary policy are likely to remain accommodative. <\/li><\/ul>","synopsisDe":"","synopsisIt":""}]

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Marco Valli
Global Head of Research
Chief European Economist
UniCredit Bank, Milan
Piazza Gae Aulenti, 4 - Tower C - MRE4
I-20154 Milan
Italy
+39 02 8862-0537

Marco Valli is Global Head of Research and Chief European Economist at UniCredit. Previously, he served as Chief Eurozone Economist and Chief Italian Economist. Before joining UniCredit in 200...

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