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78f6c72b509229f3ef77a71224b9fc6b147da4ee04fe56b12377231eaa21e01d;;[{"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":"","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":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":""},{"layout":"detailed","uid":26121,"publicationDate":"10 Sep 21","emaObject":{"protectedFileLink":"https:\/\/www.research.unicredit.eu\/DocsKey\/economics_docs_2021_181081.ashx?EXT=pdf&KEY=C814QI31EjqIm_1zIJDBJEqTcTVirxadPgUmEhAJ06A=&T=1&T=1","protectedFileLinkDe":"","protectedFileLinkIt":""},"title":"Chart of the Week - Durable goods fuel price pressure in the eurozone","titleDe":"","titleIt":"","product":"Chart of the Week","synopsis":"<ul class=\"ucrBullets\"><li> Our Chart of the Week shows that in the eurozone pipeline price pressure in consumer goods is largely driven by durable goods, and there are no signs of a turning point yet. <\/li><li> The European Commission gauge for selling price expectations as reported by producers of durable goods has skyrocketed to record-high levels during the summer, while upward pressure is less intense for non-durable goods. We expect that this evidence will increasingly be reflected in PPI numbers, which show a tight correlation with the survey. <\/li><li> Supply bottlenecks probably explain most of the strong price increases, given that Italy is the only country among the four largest eurozone member states in which demand for durable goods has exceeded pre-crisis levels. <\/li><li> Retail prices of durable goods have been accelerating, and further pressure in the coming months is baked in the cake. Yesterday, the ECB revised up its inflation forecasts, assuming that supply disruption will last into 1H22, longer than previously expected. However, durable goods account for only about a third of total core goods in the HICP basket. This should help mitigate the effect on core and headline inflation.<\/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":"Euroland","ticker":"","link":"https:\/\/www.unicreditresearch.eu\/index.php?id=country&tx_research_piedition%5Bcountry%5D=25&tx_research_piedition%5Baction%5D=country&tx_research_piedition%5Bcontroller%5D=Edition&cHash=fd74dfc966e72d45ff2580813616e07a"},{"name":"Europe","ticker":"","link":"https:\/\/www.unicreditresearch.eu\/index.php?id=country&tx_research_piedition%5Bcountry%5D=26&tx_research_piedition%5Baction%5D=country&tx_research_piedition%5Bcontroller%5D=Edition&cHash=253d12e5521ae4b9a73e892ee04713f2"}]},{"layout":"detailed","uid":26056,"publicationDate":"02 Sep 21","emaObject":{"protectedFileLink":"https:\/\/www.research.unicredit.eu\/DocsKey\/economics_docs_2021_181007.ashx?EXT=pdf&KEY=C814QI31EjqIm_1zIJDBJEqTcTVirxaddf1E3ZpA8eE=&T=1&T=1","protectedFileLinkDe":"","protectedFileLinkIt":""},"title":"Chart of the Week - Eurozone inflation will rise further, but monetary policy should look through this","titleDe":"","titleIt":"","product":"Chart of the Week","synopsis":"<ul class=\"ucrBullets\"><li> The August flash estimate of eurozone inflation published on Tuesday surprised to the upside, showing a sizeable acceleration in the headline rate to 3.0% yoy from 2.2%. This is its highest level since late 2011. Core inflation rose strongly, to 1.6% yoy from 0.7%, explaining most of the jump in headline inflation. Our Chart of the Week breaks down core inflation into its two main components: services and core goods. It shows that the August acceleration was almost totally driven by a huge spike in the prices of goods. The gap between services and goods inflation, which had always been positive in the two and a half decades before the pandemic, has turned negative by an unprecedented 1.6pp (services: 1.1%, core goods: 2.7%). <\/li><li> Several temporary factors explain this unusual pattern. First, goods inflation was artificially inflated by the late start last year of summer sales on apparel in France and Italy, among other eurozone member states. This is a purely statistical effect, which reversed weakness recorded in the yearly change in apparel prices for July and which should fade over the next one or two months. Second, it is highly likely that manufacturers have continued to pass on some of the cost increases caused by supply bottlenecks and rising commodity prices. To the extent that higher production costs largely reflect the global ramifications of the pandemic, this should also be considered as a temporary factor, although available indicators suggest that its effects will last longer than expected, most probably into 2022. Third, services inflation was dampened during the summer months by lower weights (compared to 2020) for travel, leisure and hospitality expenses in the HICP basket. This explains why the reopening of several tertiary activities and a rebound in demand have been accompanied by weak services inflation until now. This effect will likely reverse in the fall, when these price categories typically record large seasonal price declines. We expect services inflation to rise more meaningfully over the coming months. <\/li><li> Overall, transient factors have played a key role in driving inflation in the euro area, and we expect they will continue to do so at least until the end of the year. These factors also include a 15.4% yoy increase in energy prices (which alone accounted for half of the headline inflation rate in August) and changes in Germany\u00b4s VAT rate. We expect that headline and core inflation will rise further in the coming months, before probably peaking in November. A clear slowdown is likely to start at the beginning of 2022, helped by the fading of the VAT effect in Germany, and to continue in subsequent months. This deceleration might push headline inflation back below 1.5% in about a year\u00b4s time, amid a strong base effect on energy prices. Monetary policy should remain patient and persistent. <\/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":"Euroland","ticker":"","link":"https:\/\/www.unicreditresearch.eu\/index.php?id=country&tx_research_piedition%5Bcountry%5D=25&tx_research_piedition%5Baction%5D=country&tx_research_piedition%5Bcontroller%5D=Edition&cHash=fd74dfc966e72d45ff2580813616e07a"},{"name":"Europe","ticker":"","link":"https:\/\/www.unicreditresearch.eu\/index.php?id=country&tx_research_piedition%5Bcountry%5D=26&tx_research_piedition%5Baction%5D=country&tx_research_piedition%5Bcontroller%5D=Edition&cHash=253d12e5521ae4b9a73e892ee04713f2"}]}]

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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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