115
Eurozone UK US
110
105
100
95 2006 2008 2010 2012 2014 2016
Index, 2007=100. The one-off bounce in Eurozone real GDP in early 2015 reflects the statistical impact of asset shifts of major multinational corporations in Ireland and not a change in underlying growth dynamics. Source: Eurostat, ONS, BEA. 160
140
120
100
80
Eurozone UK US
60 2000 2003 2006 2009 2012 2015
Household debt as % of gross disposable income. . Source: Eurostat, ONS, Fed. 50 Eurozone UK US 40
30
20
10
0
-10 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016
Increase in the ratio of gross government debt to GDP since the start of the euro, in percentage points of GDP. End-2016 ratios: Eurozone 91.6%, UK 89.2%, US 108.1%, Japan 250.7%. Source: Eurostat, EU Commission projections for 2016.
15 120
10 100
5 80
0 60
-5 40 Real business fixed investment (lhs, yoy %) -10 20 CEO economic outlook index (rhs, 1Q lead) -15 0
-20 -20 2003 2005 2007 2009 2011 2013 2015 2017
CEO economic outlook index, left-hand scale; real business fixed investment, yoy change in %; right-hand scale. Source: Business Roundtable, Bureau of Economic Analysis, Berenberg calculations 8000 2500
2000 6000
1500
4000
1000
2000 Existing home sales, lhs 500
Housing starts, rhs 0 0 1991 1994 1997 2000 2003 2006 2009 2012 2015
Existing home sales and housing starts, in 1000s, 3-month rolling average. Source: BLS. 9 Employment cost index: civilian workers, yoy % 8 Avg. hourly earnings: total private, yoy % Federal Funds (effective) Rate, % p.a. 7
6
5
4
3
2
1
0 1990 1995 2000 2005 2010 2015 Quarterly data. Yoy change in % for Employment cost index and avg. hourly earnings. Federal Funds rate in % p.a. Source: BLS. 60
40
20
0
Total investment Real estate Public investment -20 2000 2003 2006 2009 2012 2015 Yoy change in %, 3-month average. Source: China National Bureau of Statistics. 4000 Official foreign exchange reserves (USD bn) 3500
3000
2500
2000
1500
1000 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 In billion US dollar. Source: PBoC, Bloomberg. 120 120
110 110
100 100
90 90
Eurozone 80 80 Periphery
Germany 70 70 2005 2007 2009 2011 2013 2015 2017
Economic sentiment, Eurozone, Germany and weighted average for Spain, Portugal, Greece and Cyprus; no data for Ireland. 100= long-term average. Source: European Commission. 3
2
1
0
-1
-2
Industry: order books -3 Services: current employment Consumers: major purchases -4 1999 2002 2005 2008 2011 2014 2017
Volume of order books in manufacturing industry, current employment in services, major purchases at present in consumer sentiment survey, standard deviations from long-term average, three-month moving averages. Source: European Commission, monthly economic sentiment survey . 5 Headline inflation (yoy, %) Core inflation (yoy, %) 4 ECB main refinancing rate (%)
3
2
1
0
-1 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018
Refinancing rate of the ECB and annual growth rate of headline inflation and core inflation (excluding energy, food, alcohol and tobacco) in %; dotted lines: Berenberg forecasts. Source: Eurostat, ECB, Berenberg forecasts. 30 Fed 25 ECB 20
15
10
5 ECB QE 0
-5 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Increase in ratio of central bank balance sheet to GDP, in percentage points of GDP since Q1 2008. Dotted lines: projecting a stable nominal balance sheet for the Fed and an increase in the ECB balance sheet by €80bn of asset purchases per month between April 2016 and March 2017, and €60bn from April 2017 onwards. Source: ECB, Bloomberg, Berenberg calculations. 120 Net flow of bank loans to non-financial corporations Net flow of bank loans to households 3-month avg of bank loan net flow to NFC and HH 80
40
0
-40 2003 2005 2007 2009 2011 2013 2015 2017
Net flow of bank loans, in € bn; from February 2009 onwards adjusted for loan sales, securitisations and notional cash pooling. Net flows to non-financial sector are 3/month moving average. Source: ECB. 32 Core employment 31
30
29
28
27
26 1992 1995 1998 2001 2004 2007 2010 2013 2016
Core employment: subject to social security contributions, in million. Source: Bundesagentur für Arbeit, Bundesbank. 1300 Exports 1200 Imports 1100
1000
900
800
700 2003 2005 2007 2009 2011 2013 2015
Real exports and imports of goods and services in chained 2010 prices, 4-quarter rolling sum in billion of euro. Italy, Spain, Greece, Portugal and Ireland. Source: Eurostat, Berenberg calculations •
160 • Germany • 150 Spain •
140 •
130 • 120
• 110 • 100 • 1990 1994 1998 2002 2006 2010 2014
Nominal unit labour costs, 1990=100. Source: European Commission. 0.60 2011/2012 2013/2014 0.50 2015/2016
0.40
0.30
0.20
0.10
0.00 France Italy United Kingdom EZ19
Responsiveness to OECD’s Going for Growth reform recommendations. Average results for 2011/12 and 2013/14 and for 2015/16. Source: OECD • • •
• • • •
• • •
Seats in 150-seat parliament: opinion polls and final result
45 VVD PvdA PVV SP 40 CDA D66 GL 50+ 35
30
25
20
15
10
5
0 Jan 15 Jul 15 Jan 16 Jul 16 Jan 17
Actual result and prior seat projections for 150-seat parliament. Centre-right VVD, centre-left PvdA, ultra-right PVV, left-wing SP, centre CDA, centre D66, centre GL, centre 50+, average of 7 latest available polls. Source: National opinion polls, Berenberg calculation. First round of the French presidential election on 23 April: opinion polls and result
30
25
20
15
10
5 Le Pen Fillon Macron Mélenchon Hamon 0 Jan-17 Feb-17 Mar-17 Apr-17
Support for candidates in the first round of the presidential election, average of last eight opinion polls and final result. Source: National opinion polls, French ministry of the Interior. French presidential election: opinion polls for the second round on 7 May
30
25
20
15 Macron vs. Le Pen Clinton vs. Trump Brexit: Remain vs. Leave 10
5
0
Deviation of prior opinion polls from Clinton/Trump and Brexit results -5 -16w-15w-14w-13w -12w-11w-10w -9w -8w -7w -6w -5w -4w -3w -2w -1w 0w
Support for candidates in the second round of the presidential election. Source: National opinion polls. 900
800 New asylum seekers, in 1000s 700
600
500
400
300
200
100
0 1970 1974 1978 1982 1986 1990 1994 1998 2002 2006 2010 2014 Number of asylum applications in 000s. 2015 and 2016 number of arrivals; 2017 estimate extrapolates data for the last three months. Source: BAMF. German opinion polls: centre-left SPD surges – mostly at the expense of the fringes
50
45
40
35
30
25
20 CDU/CSU SPD Greens FDP The Left AfD 15
10
5
0 Sep-13 Mar-14 Sep-14 Mar-15 Sep-15 Mar-16 Sep-16 Mar-17
Centre-right CDU-CSU, centre-left SPD, centre-left Greens, liberal FDP, ultra-left The Left and radical right AfD, average of 7 latest available polls. Source: National opinion polls, Berenberg calculation. Support for the combined left (red-red-green) in opinion polls 50
48
46
44
42
40 red-red-green threshold to win soft threshold if FDP below 5% 38 May-14 Nov-14 May-15 Nov-15 May-16 Nov-16 May-17
Sum for centre-left SPD, centre-left Greens and ultra-left The Left in opinion polls, average of 7 latest available polls. The soft threshold applies if the FDP fails to make it over the 5% threshold to gain seats. Source: National opinion polls, Berenberg calculation. Share of vote for EU- or euro-sceptic populists in national opinion polls 50 Far-left eurosceptic Centre-right eurosceptic Far-right eurosceptic
40
30
20
10
0 IT AT FR SW DK SP GR NL BE GE PT FI
Italy: Lega Nord, FdI, Five Stars; Austria: FPÖ; France: Front National, DLF (striped); Denmark: DPP, Red-greens; Sweden: Sweden Democrats, Left Party; Netherlands: PVV, SGP (striped); Greece: Golden Dawn, LAEN, EE, KKE, PE; Spain: Unidos Podemos (striped); Germany: AfD; Belgium: Vlaams Belang; Portugal: BE; Finland: PS; relevant parties only; average of last five polls; striped means position somewhat unclear. Source: national opinion polls, Wikipedia, Berenberg calculations. Italian opinion polls 45 Five Star Movement Democratic Party 40 Forza Italia Lega Nord 35
30
25
20
15
10
5
0 Mar-13 Feb-14 Jan-15 Dec-15 Nov-16
Centre-left Democratic Party (PD), centre-right Forza Italia (Berlusconi), radical left Five Star Movement (Grillo), ultra-right Lega Nord, average of 7 latest available polls. Drop in support for PD after 25 February 2017 caused by defectors who founded a new left-wing party DP. Source: National opinion polls, Berenberg calculation. 30 Greece Eurozone (excl. Greece) 20
10
0
-10
-20
-30
-40 2005 2007 2009 2011 2013 2015 2017
Corporate confidence: average of industrial, services, retail and construction confidence. Source: European Commission, Berenberg calculations. •
•
•
• • • 50
40
• 30
• 20 •
10
Conservatives Labour UKIP Liberal Democrats SNP 0 May-15 Nov-15 May-16 Nov-16 May-17 SNP: Some data points include voting intentions for Plaid Cymru. Source: National opinion polls, Berenberg calculations. Rolling average shown. 90
88
86
84
82 Public debt % GDP (March 2016 Budget) Public debt % GDP (March 2017 Budget) 80
78 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 Official projections of the UK’s debt-to-GDP ratio, Maastricht definition; March 2016 projection adjusted for the revised 2015/16 outcome. Source: Office for Budget Responsibility
Mutual exposure of UK and EU 27 to each other • 14
12
• 10
8
6 •
4
2
0 UK EU GE SP FR IT UK data shows exports to EU 27 as % UK GDP. All other country data shows exports to UK as a % of GDP. Source: ONS, Bank of England, Eurostat, Berenberg. UK share in Western German imports • 22 Western German imports: share of UK relative to initial EEC members 20 EEC founded without UK • 18
16
14
12 UK joins EEC
10 • 8
6 • 1956 1960 1964 1968 1972 1976 1980 1984 1988 UK share in Western German imports of goods, in % of Western German imports from original EEC members France, Italy, Benelux. Source: Bundesbank.