Europe Economics Update Spreads will keep widening before ECB takes action We suspect that the spread between 10-year Italian and German government bonds would need to widen by another 100bp or so, to around 3.5%, to force the ECB to make a stronger formal statement of... 14th June 2022 · 3 mins read
Europe Commercial Property Update Will property resist the effects of deglobalisation? A recent MSCI article speculated that real estate investment could buck the deglobalisation trend given distinct features of the asset class, though we are not convinced that will bring many benefits... 14th June 2022 · 3 mins read
Europe Data Response German ZEW Survey (June) A second consecutive small monthly rise in the ZEW measure of German investor sentiment in June means it was still well below its level at the start of the year, and pointing to a recession. The... 14th June 2022 · 2 mins read
Europe Economics Update Greece’s rebound has further to run Greece has already made a more complete recovery from the pandemic than most of its peers and the short-term outlook still looks relatively good. The country is less exposed to Russia-Ukraine risks... 13th June 2022 · 4 mins read
Global Markets Update New, higher forecasts for EZ bond yields and spreads We are raising our forecasts for euro-zone 10-year government bond yields and “peripheral” spreads to reflect the ECB’s further hawkish shift as well as its apparent unwillingness to commit to a... 10th June 2022 · 4 mins read
Europe Economics Update ECB tightening unlikely to cause house price crash Tighter ECB policy could cause house prices in the euro-zone to fall, but we think that a housing crash will be avoided even in the Netherlands where the risks are largest. BoE Preview Drop-In (14th... 10th June 2022 · 4 mins read
Europe Economics Weekly High inflation will keep ECB hawks in charge this year Euro-zone inflation is likely to remain higher than the ECB expects over the rest of this year. That will keep the balance of opinion on the Bank’s Governing Council tilted firmly in favour of the... 10th June 2022 · 7 mins read
Capital Daily Hawkish ECB much more concerning for BTPs than Bunds While the yields of 10-year government bonds have risen across the euro-zone after the ECB sounded particularly hawkish at its meeting today, we suspect that further upward pressure on “core” yields... 9th June 2022 · 7 mins read
Industrial Metals Update Weaker demand to drag on EU steel prices Softer demand for steel in Europe has dragged prices lower recently, despite production in the region being constrained by high production costs. We expect prices to fall a little further to €900 per... 9th June 2022 · 2 mins read
Europe Economics Update No majority would hinder, not upend, Macron’s plans The latest polls for this month’s legislative elections in France raise the possibility that Macron’s party and allies may not win a majority. But even so, support from the centre-right might avoid a... 9th June 2022 · 3 mins read
Europe Economics Update ECB to raise rates, and without a new backstop Today’s policy statement and press conference sets the stage for the ECB to raise interest rates by 75bp by September and we expect that to be followed by two more hikes this year. The Bank’s failure... 9th June 2022 · 3 mins read
Europe Commercial Property Valuation Monitor Office sector joins industrial as overvalued in Q1 Higher alternative asset yields drove a sharp deterioration in European property valuations in Q1. Valuation scores declined across all sectors, though retail remained in fair value territory. With... 9th June 2022 · 6 mins read
Europe Data Response Euro-zone GDP & Employment (Q1) The upward revision to euro-zone GDP in Q1 was in large part down to the huge increase in Ireland, where the GDP data are notoriously unreliable. So the data aren’t as good as they look. And we still... 8th June 2022 · 2 mins read
Europe Data Response German Industrial Production (April) April’s increase in industrial output reversed only a fraction of the decline in March and shows that high energy prices, the Ukraine war and ongoing supply shortages are still having a major impact... 8th June 2022 · 2 mins read
Europe Chart Pack Tailwinds fading, headwinds building With some important exceptions, including the German manufacturing sector, economic activity seems to have held up a little better than we had feared so far in Q2. We don’t think this will last. The... 7th June 2022 · 10 mins read
Europe Economics Looming ECB rate hikes give SNB plenty to ponder We forecast the SNB to largely shadow ECB rate hikes over the next 18 months or so, albeit allowing the interest rate differential with the euro-zone to widen from 25bps at present to 50bps by end... 7th June 2022 · 4 mins read
