Highlights When it comes to policy easing, the euro area 5-year yield at -0.15 percent is running out of road, while the U.S. 5-year yield is still at the dizzying heights of 1.8 percent. Hence, the ECB is likely to come out the loser…
Highlights 10-year real Spanish and Portuguese bond yields have already fallen below the neutral rate of interest for the entire euro zone. This suggests monetary conditions could now be favorable for all euro zone countries. Should…
Highlights Huge imbalance #1 is the euro area’s $150 billion trade surplus with the United States. Huge imbalance #1 has resulted from the ECB holding interest rates at the lower bound while the Fed tightened policy. The upshot…
The barrage of bad news in the past 24 hours is impressive. As the U.S. is extending its blacklist of Chinese companies, fears are growing that a resolution to the trade tensions is more elusive than ever. Moreover, Japanese…
Highlights In the second half of 2019, economic growth will stop accelerating… …but an underpinning of equity valuations will limit sell-off magnitudes to around 10 percent or so, rather than deeper sustained plunges.…
Interestingly, emerging markets (EM) versus developed markets (DM) has followed a near carbon copy profile, albeit the outperformance was front-end loaded. Can this continue? Recent history is not very encouraging. Since the…
Here’s the paradox: while the level of German exports is very high, it has been flat-lining at this elevated level since 2012. Hence Germany is no longer deriving any structural growth from its export sector. Germany…
Highlights The short-term trade is to overweight the DAX or Euro Stoxx 50… …versus German bunds or the S&P 500. These trades have outperformed since late last year and can continue to do so for a while longer. But…
Highlights So what? Quantifying geopolitical risk just got easier. Why? In this report we introduce 10 proprietary, market-based indicators of country-level political and geopolitical risk. Featured countries include…
Yesterday, the German factory orders sent a chill down the spine of anyone with a positive disposition toward European growth, as they fell 8.4% on an annual basis in February. However, foreign orders drove this meltdown,…