Eurozone: Positive about the growth and inflation outlook – Nomura

Analysts at Nomura explains that they have been – and remain – positive about the growth and inflation outlook for the eurozone and continue to expect incoming dataflow to surprise the consensus on the upside.

Key Quotes

“One of the important – and, in our view, under-appreciated – reasons for our optimism is the improvement that is taking place in many European economies’ labour markets. Labour market activity in nearly every major European sector and every major country has been improving in recent months. Youth unemployment has fallen very sharply in a number of economies and most notably in Italy. That bodes well for wages inflation and thus for retail sales in the period ahead. On that last point falling youth unemployment tends to be very positive for consumer spending trends. Not only does it generate firmer household income growth. It also tends to unleash strong pent-up demand via higher spending on consumer durables.”