Macroeconomic & Geopolitical

Can Draghi’s Europe Catch up With Biden’s America?

February 2021 – 3 min read
A rise in U.S. retail sales showed that fiscal stimulus is working and keeping shoppers in the driver’s seat. In Europe, smaller fiscal support and tighter restrictions have weighed on consumer spending but investment and export growth point to a stronger second half of 2021.


Arrows indicate consensus forecast compared to the previous period. Local dates of release.


  • Personal income, savings, and spending for January are set to jump alongside stimulus disbursements. January retail sales figures show consumers are spending their extra cash, but the savings rate will show how much is being stashed away—particularly among the higher-income cohort.
  • We watch to see how higher input prices and limited supply impact house prices and sales.


  • We will be looking at the final estimate of EZ CPI for January. If there is an upward revision, this could spark fears of an inflation reemergence. Base effects and supply constraint in commodities are likely to cause inflation to accelerate further in the next month. While this warrants close monitoring, our baseline, which calls for inflation to remain well below the ECB’s target of 2% this year and next, remains unchanged.

Asia Pacific

  • The PBOC is expected to remain on its current path of a targeted easing of stimulus. While greater restrictions during the Lunar New Year are weighing on activity data, this is seen as temporary.
  • Eyes are on Japan retail sales for January. Though Japan’s domestic demand ended 2020 stronger than expected, renewed restrictions are likely to be a weight in Q1.

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Matteo Cominetta

Director, Economist

Agnès Belaisch

Managing Director, Chief European Strategist

Max Bennett


Christian Floro

Associate Director

Kathryn Asher

Associate Director, Economist

Christopher Smart, PhD, CFA

Chief Global Strategist & Head of the Barings Investment Institute

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