May 18, 2020

The Covid-19 outbreak is sending the U.S. economy into an unprecedented recession: Our central scenario anticipates a -2.7% contraction of economic activity for the year 2020, taking into account a two-month lockdown period and a U-shaped recovery starting in Q3. The impact of the crisis on the U.S. retail industry is also unprecedented and will have lasting consequences on all segments. However, we find a clear divide between food retail, which is resilient, and discretionary retail, which is cyclical, at least for the eighteen months to come.

May 15, 2020

In Europe, both new car registrations and the business climate slumped in April. High frequency indicators based on Google trends now point to a renewed interest in cars but with the exception of Germany, that won’t be enough to drive a strong revival in car purchases before Q3.

May 15, 2020

The Covid-19 crisis has pulled the rug out from under the feet of the German economy. According to the Federal Statistical Office's flash estimate, the GDP setback in Q1 2020 amounts to a hefty -2.2% Q/Q - the sharpest rate of decline since the height of the great financial crisis (Q1 2009).

May 14, 2020

In the wake of Covid-19, developed markets’ long-term yields have fallen significantly. However, market participants seem uncertain how to integrate the ensuing massive fiscal and monetary easing in their medium-term rates expectations.

May 13, 2020

UK Q1 GDP fell by -2% q/q, in line with expectations. This release confirms that each week of lockdown cuts output by around -6%. Even before implementing a Covid-19 lockdown on 23 March, the UK economy was already on a weak footing, posting no growth in Q4 2019. And at the start of the year, advanced indicators pointed to below normal investment activities and trade as Brexit uncertainty was still looming.

May 08, 2020

The Corona pandemic renders the German government’s optimistic economic assumptions on which the forecast of the pension contribution rates and the benefit level until 2025 are based, obsolete. Due to short-time work and rising unemployment looms a shortfall of at least EUR 8bn. With pension cuts prohibited by law, an increase of the contribution rate can only be avoided by depleting the sustainability reserve faster than planned.