Getting high on low interest rates – How falling interest rates have driven savings higher

Our results show that the impact of interest rates on savings behavior is remarkably low. Demography and social policies have a stronger role to play here: precautionary and retirement provisions seem to take the lead in savings behavior in Europe.

German SMEs will face higher credit risk in 2020

Even though Germany narrowly avoided a technical recession in 2019[1], economic activity is still considerably weak as we expect GDP to grow by only +0.6% in 2020. In this environment, credit risk will most likely increase and be at top of mind for companies, lenders and investors.

Poland: Heading for another slowdown in 2020

The expected deceleration of Poland’s economic growth in 2019 has been confirmed. Real GDP expanded by +4.0% in the year as a whole, down from +5.1% in 2018 and slightly below the consensus forecast (+4.2%), according to preliminary estimates. 

ECB Strategy Review: Easy does it!

At first glance, the U.S. retail industry is the typical case of what the Austrian economist Joseph Schumpeter called “creative destruction”, in which new entrants capture growth or create new markets altogether at the expense of established companies.

U.S.. energy: Black not gold

Tight finances and weak growth. The U.S. energy sector, particularly shale oil, is highly leveraged, with an averge gearing close to 200% and net debt to Ebitda ratio of 2.8x for our independent/shale basket of quoted companies.

Retail in the U.S.: Towards destructive destruction

At first glance, the U.S. retail industry is the typical case of what the Austrian economist Joseph Schumpeter called “creative destruction”, in which new entrants capture growth or create new markets altogether at the expense of established companies.

Russia: External account: more a story of oil and less of sanctions

The strong decrease in Russia’s current account surplus in 2019 has been confirmed. It declined to USD71bn (an estimated +4.2% of GDP) in 2019, down from USD114bn (+6.8% of GDP) in 2018. Merchandise exports dropped by -6% or -USD25bn to USD418bn in 2019. 

China: The slowdown is managed, but not over

China’s GDP growth came in unchanged at +6.0% y/y in Q4 2019, in line with consensus expectations.

U.S.-China trade deal: No biggie, but de-escalation confirmed

The U.S. and China officially signed a “Phase 1” trade deal on 15 January: The U.S. will halve its 15% tariff on about USD120 billion of Chinese goods and suspend planned duties that were set to take effect last December.