ING views that the Eurozone will show some moderation in 2018

  • Trade balance and industrial data confirms that start of the year has been somewhat softer than expected
  • Outlook for external demand has undoubtedly become more difficult
  • "Whether it is a strong euro or a looming trade war, it is not difficult to see the outlook for Eurozone exports becoming more challenging"
  • Eurozone economy could get hurt in a trade war without the EU being an essential player in it
  • Euro strength has yet to cause businesses to experience a loss of competitiveness
  • But is likely to play a role in weakening exports data
  • It does look like peak Eurozone growth has already been reached, so 2018 will show some moderation

The rhetoric that the Eurozone has peaked at the end of last year gains further traction and the slowdown in Q1 this year is part of that too.

While growth and economic data points are still decent, the outlook remains a little more cloudy now following the soft start to the year. The real worry for the ECB is if this drags on to Q2 and even 2H 2018.