The European Economy Podcast with Fexingo: ECB, Eurozone, and Continental Markets

Eurozone headline inflation just hit 3.2 percent, but Lucas and Luna dig into a number you haven't heard about: Europe's food price index. While energy costs dominate the headlines thanks to the Iran war, food inflation has quietly climbed to 4.1 percent in the eurozone—driven not by oil, but by fertilizer costs, logistics bottlenecks, and a drought in Spain that's hitting olive oil and fresh prod...

The conventional wisdom says rising interest rates crush bank stocks — but in the eurozone, the exact opposite is happening. Lucas and Luna dig into why the ECB's rate hikes have turned European banks into profit machines. They examine how net interest margins widened even as lending slowed, why the ECB's Targeted Longer-Term Refinancing Operations reversal is squeezing liquidity, and how a 3.2% e...

Lucas and Luna examine how the Eurozone's persistent 3.2% inflation is being transmitted globally through energy prices, food exports, and financial channels. They break down the 'inflation export' mechanism using the recent euro weakness and the ECB's tightening stance. The hosts cite concrete data: the trade-weighted dollar index at 118.9 and eurozone nominal GDP of $31.8 trillion. They argue th...

Eurozone inflation hit 3.2% in May, driven by energy costs from the Iran war. But core services inflation remains stubbornly above 4%. Lucas and Luna unpack why the ECB can't declare victory, how the 'double scar' of past price shocks is changing consumer behavior, and what the latest job openings data from the US tells us about wage pressure spilling over to Europe. They also look at why southern...

Lucas and Luna examine Europe's deepening skilled labor shortage and how it's reshaping competition across the Eurozone. With the ECB's rate path uncertain and GDP growth picking up, labor constraints are becoming the binding factor—especially in Germany and France. They explore new data on unfilled vacancies, wage pressures, and the surprising winners: countries like Portugal and Spain that are a...

The euro has been quietly strengthening this year, even as the Eurozone economy grows at a modest 1.6 percent and energy prices remain elevated due to the Iran conflict. Lucas and Luna dig into the numbers: the trade-weighted dollar index has slipped to 119.3, while the euro holds around $1.16. They explore the structural shift behind the currency's resilience — from a shrinking US current account...

With the Iran war driving European defense spending to levels not seen since the Cold War, this episode examines how the military buildup is becoming a structural economic force. Lucas and Luna look at the numbers: Germany's special €100 billion defense fund, France's 40 percent increase in procurement, and the surprising multiplier effects on European manufacturing and employment. They also discu...

Eurozone consumer confidence has risen for four consecutive months, hitting its highest level since early 2022. Lucas and Luna drill into the specific drivers: falling energy prices, a tighter labor market, and the surprising resilience of Southern European economies. They examine why the recovery is uneven — Germany lags while Spain and Italy surge — and what it means for the ECB's next move. Alo...

The ECB has cut rates three times in 2026, but services inflation remains stubbornly above 4 percent. Lucas and Luna drill into why — from the hotel price spiral in Southern Europe to wage catch-up in Germany. They cite the latest PMI data showing services input costs accelerating even as manufacturing cools. Spain's tourism boom is pushing up prices across the bloc, and the ECB's preferred measur...

Lucas and Luna dig into the latest Eurozone inflation data for May 2026, which shows core inflation stuck at 3.3% despite a broader economic slowdown. They examine why services inflation remains sticky, the role of wage growth in the labor-intensive services sector, and how the ECB's tightening cycle may be less effective than hoped. Along the way, they reference recent comments from ECB officials...

In this episode, Lucas and Luna explore a puzzling disconnect: while the ECB has kept rates elevated to cool inflation, European housing prices in countries like Spain, Portugal, and the Netherlands have been rising steadily since late 2025. They dig into the specific case of Spain, where prices climbed 6.8% year-over-year in the first quarter of 2026, driven by demographic shifts, supply constrai...

Europe's pension funds are quietly shifting billions from public bonds into private credit — a structural change that could reshape the continent's capital markets and risk landscape. Lucas and Luna break down the forces behind this migration: low yields on government debt, the search for income in an aging population's retirement portfolios, and the regulatory push via the European Long-Term Inve...

Episode 18 of The European Economy Podcast. Lucas and Luna examine a surprising trend: the euro is trading flat against the dollar despite persistent energy inflation and a hawkish Fed. With the trade-weighted dollar index slipping to 119.3 and the euro holding at 1.16, they explore how Europe's evolving energy policy, a shift in global reserve preferences, and Southern Europe's bond market stabil...

Lucas and Luna unpack a quiet revolution in European finance: corporate bond issuance has surpassed new bank lending for the first time in the eurozone's history. Drawing on ECB data showing €185 billion in net corporate bond issuance in Q1 2026 versus €120 billion in new bank loans, they explore what this shift means for businesses, investors, and the continent's banking model. They discuss the r...

For years, the narrative about the Eurozone has been that Germany drives growth and southern Europe lags. But that story is flipping. In this episode, Lucas and Luna dig into new data showing Spain outpacing Germany on industrial output, export growth, and job creation. They look at why Spanish manufacturing is benefiting from nearshoring trends, how tourism and digital services are reshaping the...

The Iran war has forced Europe to rethink energy reliance faster than any policy debate could. We look at a specific number: the 20 percent drop in Russian gas flows through Ukraine since January, and how that plus Iran instability is driving a real shift toward nuclear and renewables. We also examine why the UK-Gulf trade deal is less about oil and more about future-proofing supply chains. Lucas...

Lucas and Luna explore why European equities are handily outperforming US stocks in May 2026, with broad-based ETF gains of 3-5% in a single week. They drill into the numbers: a weaker dollar at 119 on the trade-weighted index, the euro holding at 1.16, and diverging central bank expectations. Lucas argues it's not just a rate story — it's about the Iran war's asymmetric impact on US consumer conf...

European equity ETFs have been on a tear, with the VGK up over 3% in the last five days alone. But beneath the surface, a structural shift is happening: the underlying stocks are becoming less liquid as passive funds buy more of the free float. In this episode, Lucas and Luna unpack how the rise of ETFs in Europe could be amplifying market moves, using the surge in VGK and EZU as a case study. The...

European stocks are posting solid gains in late May 2026, with the VGK ETF up 1.5% over five days, yet the euro is sliding against the dollar — dropping from $1.17 to $1.16 in the same period. In this episode, Lucas and Luna unpack the seeming paradox. They trace the divergence to the Iran war's impact on European energy costs, the ECB's reluctance to hike into a fragile recovery, and a surprising...

For decades, investors treated Italian and Spanish government bonds as the eurozone's riskiest bets—higher yields for higher default risk. But something has shifted in 2026. Lucas and Luna examine the data: Italian ten-year BTP yields have converged toward German Bunds, and Spanish debt now trades tighter than France in some maturities. The catalysts are structural, not cyclical: a European fiscal...

For years, Germany was the engine of European growth. But in 2026, a quieter shift is underway. While the German economy struggles with energy costs and China exposure, a new group of Eurozone countries is posting faster GDP gains. Lucas and Luna unpack the data: real GDP growth in the Eurozone hit an annualised 2% in early 2026, up from just 0.5% a year earlier. But that headline number masks a d...

Lucas and Luna dig into a quiet but growing shift in European trade logistics: the re-routing of container ships around the Cape of Good Hope to avoid disruptions in the Red Sea. They connect this to the recent Eurozone ETF gains—VGK up 1.5% in five days—and the surprising resilience of European exporters. Along the way, they ask whether higher freight costs are a one-off shock or a structural res...

The Iran war is sending shockwaves through global energy markets, and the eurozone is scrambling to adapt. In this episode, Lucas and Luna break down how the conflict is accelerating Europe's shift away from Russian gas and toward renewables — and why the ECB is starting to worry about the inflationary fallout. They look at the recent Putin-Xi talks on a stalled pipeline, the impact on eurozone GD...

With Iran war rattling energy markets and Putin-Xi talks reviving a stalled Russian gas pipeline, the eurozone faces a new external trade shock that most forecasts missed. Lucas and Luna break down why the weaker euro isn't helping exporters, why German industry is squeezed between Chinese competition and Russian gas uncertainty, and what the ECB can — and can't — do about it. They dig into a spec...

Eurozone headline inflation has cooled — but core services inflation in France and Spain is running above 4 percent. Lucas and Luna examine why the ECB's transmission mechanism is breaking down in services, how the pass-through from higher wages to prices is now structural rather than cyclical, and what that means for Lagarde's next policy decision. They ground the conversation in the latest May 2...