Highlights The ongoing pandemic underscores the need for fiscal and monetary policymakers to continue to provide a reflationary “bridge” until vaccination ends the threat to the health care system. The pending deal being…
Empirically, the current yield to maturity gives a robust sense of the returns of 30-year German government bonds over the coming five years. At the present juncture, the yield of -0.2% suggests that over the next five years, the…
Along with the rest of Europe, the German economy is suffering from the impact of the second wave of COVID-19 infections. The recently announced containment measures will only exacerbate this headwind to growth over the remainder…
Highlights With a vaccine already rolling out in the UK and soon in the US, investors have reason to be optimistic about next year. Government bond yields are rising, cyclical equities are outperforming defensives, international stocks…
Consumer sentiment in the euro area’s two largest economies is souring amid the institution of renewed measures to control the pandemic. Germany’s GfK consumer confidence survey slipped to -6.7 from -3.2, missing…
Yesterday’s Ifo survey of German Business Confidence was promising. The business climate index rose for the fourth consecutive month in August to 92.6, topping the 92.1 consensus forecast. The current assessment component…
German assets maintain the most appealing risk profile in the euro area. The DAX’s attraction reflects two forces. First, German equities are heavily overweight industrial stocks. The global manufacturing sector is…
The drubbing in the US/EMU sovereign bond spread is cause for concern for the SPX’s slingshot recovery off the March 23 lows, especially given the tight positive correlation of these two series over the past three…
BCA Research's European Investment Strategy service's fractal trading model has given them a sell signal on the stock-to-bond ratio. Since 2015, a collapsed 65-day fractal structure of the German stock-to-bond ratio…
Highlights Butterflies & Yield Curve Models: With bond market volatility now back to the subdued levels seen prior to the COVID-19 market turbulence earlier in 2020, it is a good time to update our global yield curve valuation…