European Leading Indicators | Signals of improving inbound capital in Q3

Here we look at the European leading indicators in the world of economics.

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Key Insights:

• Europe remains the leading destination for international capital, with Germany ranking third globally. Inbound investment for Q3 to date, including pending deals, has reached €13.7bn, according to MSCI Real Capital Analytics, already surpassing Q2 volumes. While the US remains the largest source of capital into the region, activity from other global markets such as Canada, the UAE, Singapore, Australia, and Japan has increased notably, reflecting a shift towards safe-haven destinations. 
• The likelihood of an ECB cut in September has diminished, with Eurozone inflation holding steady at 2.0% in July. Capital Economics expects the deposit rate to remain at the current level of 2.0%, while Oxford Economics still forecasts one final cut in December. Meanwhile, the 5-year Euribor swap rate stands at 2.2%, down ca. 15bps from last year, while rates in the US and UK have edged slightly higher, further highlighting Europe’s appeal to international investors.
• Biotech is one of Europe’s global strengths, home to five of the world’s top 10 countries for biotech companies. This has a direct impact on real estate, supporting the demand for lab space with high-spec, non-standard building requirements, as highlighted in our Tech for Good Series.