Euro Area
Investor and business sentiment continues to improve in the Eurozone. The ZEW Expectations series for the Eurozone (+3.1 to 47 in May) and Germany (+4.2 to 47.1, above expectations) strengthened to 27-month highs. Moreover, the spread between the expectations…
German Bunds have cheapened considerably, and the ECB is about to start cutting rates. Does this combination guarantee immediate profits from buying these bonds?
European retail sales were stronger-than-expected in March. They grew by 0.7% y/y from an upwardly revised 0.5% contraction in February, upending expectations that they would continue to decline. Improved sales in food products were the main drivers,…
The final estimates of Spain's and France’s services PMIs were revised upwards of expectations in April, increasing from 56.1 to 56.2 and from 50.5 to 51.3 respectively. The services European harmonized PMI also increased from 52.9 to a higher-than-expected…
The cyclical outlook is gloomy for EUR/USD. We subscribe to neither the soft-landing nor the no-landing view and expect a recession to occur in late 2024/early 2025. The pro-cyclical euro would suffer in a global downturn while a recession would support the…
According to BCA Research’s European Investment Strategy service, US and Euro Area growth will likely converge in the next 12 months. Fiscal policy differences were the most visible headwind to Eurozone growth last year. The IMF estimates that the…
Euro area inflation and GDP numbers were released on Tuesday. The preliminary harmonized core consumer price index came in at 0.7% on a month-on-month basis, a decrease from 1.1% in March. The preliminary year-on-year core CPI also decreased, clocking in at…
In its latest report, BCA Research’s Global Fixed Income Strategy service introduces the latest addition in its framework for investing in global inflation-linked bonds (ILB). To apply the Euro Inflation-Linked Golden Rule, investors should follow these…
A few preliminary measures of German inflation for April were released on Monday. The month-on-month headline inflation measure came in at 0.5% an increase from last month’s reading of 0.4% but below expectations of 0.6%. Meanwhile the year-on-year version…
EUR/USD has fallen by almost 5% since July last year. There are fundamental reasons why this move has taken place. The US economy has shown significant more resilience than the European one. Consumption continues to be strong, and GDP is still growing at a…