European Leading Indicators | EU-US trade talks and improving real estate sentiment
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Here we look at the European leading indicators in the world of economics.
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Key insights:
The EU has a goods surplus with the US, but records a services deficit
The EU had a €48bn surplus in goods and services trade with the US, according to the European Commission, as both sides intensify trade talks, ranging from tariffs, to digital trade and investment. While a quick deal is unlikely, the negotiations offer some optimism that a 20% tariff, due to take effect on 9 July, could still be avoided. Meanwhile, the UK and EU reached a post-Brexit agreement on fishing and food trade, security and defence, as well as a proposed youth mobility scheme. An update on this will follow.
Global real estate sentiment reaches highest level since March 2022
Global real estate sentiment improved to -3.75, its highest level since March 2022. In the Eurozone, the recovery is underway, albeit gradually, with total CRE investment up 13% y/y in Q1 2025, according to MSCI Real Capital Analytics, supported by a relatively attractive swap rate differential with the UK and US.
Private office rents hit record highs across key European markets
Average prime European office rents rose 9% y/y in Q1 2025, according to Knight Frank Insight, with key markets such as Paris CBD, Munich, and Berlin reaching record highs. Limited supply supports a positive rental outlook, though the polarisation between prime and non-prime locations and in asset quality is growing.
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