European Leading Indicators | Will the ECB cut rates before the Fed?

Here we look at the European leading indicators in the world of economics.

Download the dashboard for in-depth analysis into commodities, trade, equities and more with a focus on Europe.

Key insights:

• The Composite PMI for the Eurozone rose to 50.3 in March and exceeded the 50 threshold for the first time in 10 months, indicating economic activity is expanding. Spain and Italy remain the best performers, driven by healthy improvements in the services sector.
• The ECB left the deposit facility rate at 4.0% but signalled a cut in June. Following higher US inflation, markets slashed rate cut expectations for the Fed and ECB. Eurozone inflation has moved closer to 2%, but the pace and extent of rate reductions could be sensitive to  Fed policy.
• Italy recorded an increase in investment of 66% compared to Q1 2023, while the Netherlands and Sweden saw an improvement of ca. 20%, respectively. Forecasters expect the first ECB rate cut in June, which could help stoke transactional activity in more markets.

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