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Sep 22, 2020

Eurodollar: Lost in translation?

 

After its peak on 20 March 2020, the USD has depreciated 10% against the EUR (1.174 as of 21 September 2020), going back to levels last seen in mid-2018. This rapid depreciation has raised many questions about the future of the dollar. 

 

Sep 18, 2020

The big compression: The erosion of duration risk

In response to the Covid-19 crisis, the debt-to-GDP ratio in advanced economies will rise to an all-time high of 130% of GDP this year. At the same time, long-term interest rates are at an all-time low. 

 

Sep 18, 2020

Stimulus packages: German 'Wumms' vs. French 'Relance' - who does it better?

To boost growth after the Covid-19 fallout, Germany and France have introduced large stimulus packages which in terms of magnitude are playing in the same league. Digging below the surface however unveils deeply diverging approaches to boost the recovery.

 

 

Sep 17, 2020

Average inflation targeting: The US Fed buys two years of respite

At its meeting on 16 September, the last before the election, the U.S. Federal Reserve confirmed our expectations that it will keep rates at 0% into 2023, and let inflation run higher than 2% for an extended period. 

 

Sep 11, 2020

Back to School: When the tech bubble hisses

A back-to-school tech-led sell-off. As if markets wanted to remind everyone the risks of interpreting stock market movements, major U.S. equity indices had a hard day on 03 September: the S&P 500 fell by 3.51%, the NASDAQ by 4.96% and the NASDAQ 100 by 5.23% over the day. Through this correction, markets have rekindled a long-standing question about the nature of the rally that resumed in March: Is it a bubble or not?

 

 

Sep 10, 2020

Quantative Easing in Emerging Markets: Playing with fire?

The Covid-19 pandemic marked a turning point for ‘unconventional’ monetary policies in Emerging Markets (EMs), several of which embarked on government bond purchase programs to address market dislocations and ease monetary conditions in the short run.

 

Sep 09, 2020

ECB: Talking the Talk, Before Walking the Walk in December

The spreads have been closed but the ECB’s job is nowhere near done yet: Tomorrow’s policy meeting will be all about cues for the ECB’s game plan to tackle mounting deflation risks and a strong euro in the context of an uncertain economic recovery. As if the ECB did not already have enough on its plate with the unprecedented Covid-19-related growth shock, which led to the announcement of additional asset purchases to the tune of EUR1,350bn, it will now need to decide how to deal with two additional headaches to its growing list of worries.

 

Sep 03, 2020

France, Germany, Italy: Good fiscal stimulus, bad trade deficits?

The unprecedented fiscal stimulus plans launched by European governments this summer (phase II to relaunch growth engines after phase I emergency relief programs) should help to boost economic growth by +2.4pp in France, +2pp in Germany and +0.7pp in Italy over 2021-22. 

 

Sep 03, 2020

European consumers: Still firmly in the woods

Given the sharp setback in consumer spending in H1 2020, which far exceeded anything seen during the Great Financial Crisis as well as the Eurozone debt crisis, without a meaningful rebound in private consumption, economic recovery prospects will remain rather dim.

 

Sep 03, 2020

Allianz Pulse 2020: Grim expectations

The second edition of the “Allianz Pulse”, a survey to check the mood in France, Germany and Italy, reveals deep pessimism: 82% of the French, 77% of the Italian and 49% of the German respondents consider the economic outlook as bad.

138 releases in total