Germany
German factory orders contracted by a larger-than-anticipated 5.8% m/m (3.9% y/y) in August, from a 3.9% expansion (4.6% y/y). Domestically, Germany is constitutionally bound to maintain a balanced budget. The emergency pandemic funds disbursed in 2020 are…
France’s and Spain’s preliminary September CPI readings declined on a month-on-month basis, clocking in at 1.5% and 1.7% y/y respectively, and undershooting consensus expectations. Germany’s and Italy’s updates are due on Monday and the Eurozone CPI will be…
German equities have outperformed their Euro Area peers on a year-to-date basis, with the gap widening since May. The MSCI Germany Index returned nearly 4.5 percentage points more than the MSCI Eurozone index over the latter period. Since the beginning of the…
Volkswagen’s CEO has been making the point that the market for European carmakers has been deteriorating. Earlier last week, he went on to make a rather pointed reference at Chinese EV manufacturers. He was quoted saying that, "The pie has become…
The US suffers from enough imbalances to produce a mild recession. Unfortunately, such a recession could lead to a significant bear market in stocks, just as it did during the very mild 2001 recession.
Sentiment among German companies declined in August from 87.0 to 86.6. Current conditions shed 0.6 points to 86.5 while the expectations component ticked 0.2 points lower. It nevertheless exceeded consensus expectations for a larger decline. Deteriorating…
According to BCA Research’s European Investment Strategy service, investors should fade the rebound in European equities and bond yields as the euro is also at risk. Last week’s bounce in global equities is temporary. The pause in the carry trades unwound,…
German Industrial production and factory orders continued their slump in June. The usual powerhouse of the Euro Area economy has been trailing its peers throughout 2024. While both industrial production and factory orders surprised to the upside in June,…
The Euro Area economy broadly surprised to the upside in the first half of 2024. Cooling inflation lifted real wages and the global late cycle amelioration benefitted the pro-cyclical Euro Area economy, but these tailwinds are fading. First, monetary…
The real threat to European equities is growth, not political risk. How low will Eurozone earnings fall during the coming recession and how much will equities decline in response?