Germany
Over the past few months, falling inflation has provided a boost to real wages in the Euro Area which returned to growth in 2023Q3 after 9 consecutive quarters of decline. This dynamic in turn improved the purchasing power of households, boosting their morale…
Germany’s IFO survey is sending a warning. The Business Climate Index unexpectedly fell for the second month in a row in January. Importantly, increased pessimism about the current situation and the outlook are driving this deterioration in sentiment among…
BCA Research’s European Investment Strategy service concludes that investors should go long German curve steepeners. Last week at Davos, European Central Bank (ECB) President Christine Lagarde leaned heavily against the rate cuts priced in the €STR curve.…
Results of the ZEW survey sent a slightly positive signal on German investor sentiment. The economic expectations indicator rose to an 11-month high in January – beating consensus estimates of a decline. This increased optimism about the outlook reflects an…
The continued improvement in German investor morale captured by the ZEW survey corroborates other indicators pointing to near-term support for Eurozone stocks. Economic sentiment jumped three points to a 9-month high of 12.8 in December, surprising…
German factory orders sent a disappointing signal on Wednesday. New orders at German factories unexpectedly declined by 3.7% m/m in October, disappointing expectations of a 0.2% m/m rise following two consecutive months of increase. The annual rate of…
After widening since mid-year, the spread between German bunds and Italian BTPs has been narrowing over the past month. What is driving this move? Our Chief Global Fixed Income Strategist highlighted in Tuesday's BCA Live & Unfiltered livestream that both…
European flash PMI estimates for November sent a slightly less pessimistic signal on Thursday. The Eurozone composite PMI climbed by 0.6 points to 47.1, beating expectations of a more muted increase to 46.8. Notably, both the manufacturing and services…
BCA Research’s Global Fixed Income Strategy service remains long 10-year German bunds vs short 10-year Japanese government bonds (JGBs) as a tactical trade. This trade mirrors the team's two highest conviction strategic views in government bond space,…
Amid a range of geopolitical narratives, what matters is that the US strategy of economic engagement with its rivals is failing, giving rise to a new strategy of containment that will reinforce the secular rise in geopolitical risk. Our market-based quantitative indicators of geopolitical risk are set to rise in the coming year.