E.g., 18-05-2021
E.g., 18-05-2021
We have found 212 results.
View by: Grid List
Sort by: Relevancy Date
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    Heading For The Med

    “Sell in May and go away,” has long been a popular adage in Europe, a continent renowned for its predilection for long summer holidays by the Mediterranean. Last year, however, “sell in May” would have proved disastrous as an investment strategy. This year too investors should treat the old saw with circumspection.

    0
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    Europe Surprising On the Upside

    Europe may not yet have the pandemic in the rear-view mirror but infection rates in most countries are falling, vaccinations are surprising on the upside and a full opening of most services this summer seems likely. Since expectations for the eurozone remain constrained, there is a good chance that its yield curves soon steepen and the single currency strengthens.

    0
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    Doom Loop? What Doom Loop?

    Ahead of the European Central Bank’s meeting this Thursday, there has been the usual chatter about what the ECB can do to alleviate stresses in the eurozone’s financial markets. This is unsurprising, given that Covid infection rates remain stubbornly high in several of the bloc’s leading economies, and that peripheral spreads have widened in recent weeks, with the Italian 10-year spread over bunds increasing by some 10bp.

    0
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    Yield Differentials Matter—For Now

    As the first quarter draws to a close, the US dollar has confounded December’s bearish consensus expectations by generating a positive total return versus the euro of 3.8%. As Louis and Will and KX explained last week, in retrospect the US dollar’s performance over the last three months is not that surprising. The question now is: how long will these near-term factors persist?

    2
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    The Yield Curve Control That Dare Not Speak Its Name

    A year ago today, European Central Bank president Christine Lagarde said “we are not here to close spreads”. With a fair amount of water having flowed under the bridge since then, the spread between 10-year Italian BTP’s and bunds has fallen from 261bp to just 94bp. So when on the anniversary of that proclamation, she said the “ECB is not doing yield curve control”, one could be forgiven for demurring.

    1
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    The Problem With Europe’s Inflation

    Later this year, eurozone consumer price inflation should hit its highest level in more than a decade. We found out on Tuesday that February’s consumer prices rose by 0.9% year-on-year, and more price hikes are in the works. Alas, this is not the type of inflation that the European Central Bank has been seeking to engineer for the best part of a decade.

    0
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    Draghi’s Reform Plan And Asset Prices

    Newly installed as Italy’s prime minister at the head of a broad coalition, on Wednesday Mario Draghi outlined an ambitious agenda of structural reforms. Notably, the former European Central Bank chief wants to oversee a root-and-branch overhaul of Italy’s tax system, while investing in the education system and streamlining public administration. His first task will be to steer Italy through the pandemic. But beyond that, Draghi’s plans could...

    0
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    The Long Bond Bait And Switch

    Ultra-long bond issuance is back in vogue in Europe. This month Spain has sold €5bn of 50-year bonds at a yield of 1.45%, while Belgium snapped out a 50-year issue at 0.69%. In January it was France, which sold a 50-year at 0.59%. Next up is likely to be Italy, which is expected to take advantage of the tightening in spreads following the appointment of Mario Draghi as prime minister (see Draghi’s Return) to come to market with a 50-year of its...

    0
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    A Canary Chirps

    In late January, just as the GameStop squeeze was beginning to attract attention, Louis advised investors “to keep European banks on their screens.” As the canary in the coal mine of global financial markets, eurozone banks would signal broader trouble ahead if they continued to fall. But if they rebounded, it would be a sign the global inflation trade was back on (see Third Time The Charm?).

    0
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    Draghi’s Return

    Say what you like about Mario Draghi, but he’s not one to shirk responsibility in a crisis. Almost 10 years after he took the helm at the European Central Bank to steer the eurozone through its debt crisis, on Wednesday he is due to meet Italian president Sergio Mattarella, who will ask him to form a government and take over as prime minister.

    0
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    Europe’s New Lockdowns

    On Tuesday, Germany followed the United Kingdom by imposing fresh restrictions on activity and movement that in effect amount to a new lockdown comparable—and in some areas even stricter—than the anti-coronavirus shutdown imposed over the second quarter of last year. With infection rates across Europe stubbornly high despite the controls already in place, and with fears mounting about the spread of new viral strains, the risk is high that other...

    0
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    The Limits Of Europe’s Rotation

    The last five weeks have seen an impressive rally in Europe’s formerly beaten- down equity market sectors. As hopes have grown that vaccines will bring the coronavirus pandemic to an early end in 2021, the stocks of Covid losers such as banks, oil and gas companies, airlines and airports have leapt sharply higher. The Stoxx bank index, for example, is up 44% since the end of October in euro terms, 50% in US dollar terms.

    4
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    Yield Curves, The Euro And The Dollar

    The balance of probability points towards a steeper US yield curve over the short to medium term as US short rates remain pinned at zero and long-dated US treasury yields push higher. One might think that higher US long rates should attract capital inflows, but what matters is the relative shift in gradients, notably between the US dollar and euro yield curves.

    0
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    Limits To EU Solidarity

    This week, Hungary and Poland vetoed the European Union’s €750bn recovery fund in a fit of pique at a new mechanism that will stop money going to “bad boy” states deemed to impede the rule of law. With southern Europe waiting for EU cash to support its post-Covid recovery, the two eastern bloc countries hope to force a compromise that will stop outside interference in their domestic affairs. The issue tops the agenda of today’s EU leaders’...

    2
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    After Consolidation, A Further Rerating

    Given the violence of Monday’s rotation-driven rally on soaring hopes of an early coronavirus vaccine rollout, it is small surprise that equity markets are now giving back some of those gains. Expectations are still high that developed economies will be able to begin vaccination programs as early as the first quarter of next year. But the intervening days have given investors a keener appreciation of the challenges involved. Meanwhile, the...

    0
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    Europe’s Bitter Winter

    Just a couple of weeks ago there were still reasons to be sanguine about the damage that rising coronavirus infections would inflict on Europe’s economy and financial markets. Today those reasons are looking a good deal thinner. Europe’s near term trajectory increasingly resembles a “W-shaped” recovery.

    0
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    No Fiscal Panacea

    It’s been a big week in Europe’s debt capital markets. The European Union sold €17bn of bonds for its SURE job support program and Italy issued €8bn of 30-year bonds yielding 1.76%. The strength of demand was an encouraging sign, given the outsize role that debt-funded government stimulus will have to play in driving the eurozone’s economic recovery from the Covid crisis.

    0
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    European Divergence Is Back

    Like a car, the more excess weight you add to an economy, the slower it drives. Slapping restrictions on normal activities, even if income support measures are offered, makes it harder for an economy to grow. In Europe, the second wave of Covid-19 infections is having an uneven effect depending on the severity of the outbreak and the sector composition of the affected economy. The result will be to deepen the divergence in European growth and...

    0
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    The UK’s Savings Problem

    The British government's new job support scheme to take effect next month offers much less generous subsidies, and job losses are inevitable. Heightened job insecurity will mean increased precautionary savings, compounding the downturn in consumption. But the government faces institutional constraints on how much it is willing and able to borrow to plug the gap.

    0
  • Please login, request a trial or contact our sales team for more information

    Gavekal Research

    Better Days For Europe’s Domestic Plays

    It is hardly surprising that euro strength is generally bad for European exporter stocks and good for domestically-focused firms; or that exporter-heavy markets, like Germany, tend to lag at such moments. We saw this in 2017, when the euro rose almost 12% against the dollar between April and August, spurring a -2.4% fall in the DAX and a 0.7% gain in the broad Eurostoxx. So how to explain this year’s topsy-turvy markets, where the sprightly DAX...

    0
Show me: results