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U.S.& Eurozone sectors: Hunting for the weak links

Traded companies have seen remarkable investment inflows even as prolonged Covid-19 lockdowns threaten corporate earnings and debt sustainability. These inflows have led to a substantial re-compression of corporate spreads, leaving most sectors trading close to January 2020 levels. 

Europe: One in four corporates will need more policy support in 2021

The first wave of Covid-19 lockdowns caused a stronger-than-expected profitability shock for most European non-financial corporates in H1 2020, with French and Spanish firms hit particularly hard despite generous policy support. 

Saving Christmas: A EUR18bn challenge for French non-essential retailers

Restrictions on non-essential stores in France ahead of a critical holiday season are casting a shadow over nearly EUR18bn of retail sales normally made at year-end. In a particularly adverse yet realistic scenario where the sanitary situation demands store closures to last until the end of December the financial impact is not to be underestimated.

Financial and risk literacy survey – Resilience in times of Corona

The “Allianz Financial and Risk Literacy Survey”, a representative survey with 1000 respondents in each country was conducted in Germany, Austria, Switzerland, France, Italy, Spain and the US. We asked about experiences with income, consumption, savings and investment, financial literacy and risk during the COVID-19 pandemic.

RCEP: Common rule of origin could boost regional trade by around USD90bn annually

EU Carbon Border Adjustments and developing country exports: Saving the worst for the last

The introduction of the EU carbon border adjustment mechanism (CBAM) will come with a high cost for developing economies, particularly African trade partners and the Arab states of the Persian Gulf, which will face the highest ‘carbon tariffs’. 

Emerging Europe: The balance of risks is tilted to the downside

Economic activity in the Emerging Europe region rebounded markedly in Q3 2020, but new lockdowns will send the region into a double-dip recession in Q4. 

Zero interest rates: Redistribution through the backdoor

With the Covid-19 crisis, zero interest rates will become entrenched in Europe for the time being. Besides the (negative) long-term effects – rising inequality, distorted financial markets and misallocation of resources – there are also direct income effects. 

Emerging Markets: Heading for a China-less recovery

China played a crucial role in the global economic recovery after the 2008-09 financial crisis, but the post Covid-19 recovery will be different: We expect China to slow its international engagement over the next few years. 

Joe Biden´s victory: Reconciliation economics

Joe Biden won the U.S. Presidential election, thanks to slim victories in major swing states. However, without a clear Congressional majority, he will not have as much leeway as expected, even if executive orders, his long experience in negotiating bipartisan agreements and Republicans’ fatigue with partisanship could play a positive role.