The EU authorities are in denial. This is bad for equities, north-south EU bond spreads, high-yield bonds and the euro.…
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Global assets remain highly correlated, but it seems we are on the cusp of a more significant divergence in monetary…
The Italian presidential election is looming and the current PM, Mario Draghi, is the leading contender. While his appointment to…
Today’s Governing Council meeting shows the ECB is steady as she goes. The reduction in the pace of purchases for…
The ECB’s adjustment to its inflation targeting framework will require an ‘easier for longer’ policy stance. It might even necessitate…
Italy’s Target 2 story is a microcosm of a macrocosm and one that tells us a lot about the ECB,…
The thing you just can’t be neutral about is EU, Italian and Spanish restructuring plans. If these programmes succeed, we…
The ECB might not have changed policy rates or increased its QE programme, but the significance of yesterday’s policy tweaks…
This week kicks off a momentous political year in Germany, culminating in the federal election in September and subsequent retirement…
The primary focus of the ECB remains on fostering a sustainable recovery. The current policy stance fits with that. And…
We have avoided taking a position in sterling throughout the Brexit negotiations; the odds were too binary. But the government’s…
The long-awaited approval of the European Union Recovery Fund marks another seminal step towards closer European integration. Like all of…
Opinion about the “next generation EU”, announced by the EU Commission President Ursula von der Leyen on 27 May, will…
The immediate hit from Covid-19 is to society and to economic welfare. A significant longer-term issue will be how this…
Political and economic risks are rising in Germany and, with them, pressure on the CDU. This week’s fateful cooperation with…
Germany’s export-driven success leaves it highly vulnerable to changes in global trade flows. It’s also facing broad structural pressures. The…
The ongoing slump in German industrial activity isn’t likely to end soon. Many of the problems are structural and result…
The ECB’s latest stimulus package seeks to address several problems and does so quite neatly. Banks win, thanks to tiering…
Despite dodging one hard Brexit bullet, the underlying picture for the UK hasn’t changed much. A further extension of Article…
The populists might get 30% of the vote in the European Parliamentary elections, but that will translate into just above…
Pedro Sanchez’ gamble to call a snap election paid off. His PSOE has become the biggest party in parliament, its share of the vote at least 10% points ahead of any other. Yet one is left with a lingering sense of fragmentation, especially on the right.
Faltering growth and undershooting inflation expose the contradictions of the ECB’s current policy approach. Despite Draghi’s insistence, they remain well…
The collapse of Spain’s centre-left government has sounded the alarm bells. The country will now go to the polls in April, its fourth election in eight years. However, this does not mean populist parties are about to take over.
We’ve expected Sweden’s political and monetary policy shifts to give the Swedish krona (SEK) a boost. And it did for…
Europe is suffering from a noxious combination of slowing growth and rising political risk. It also has a central bank…
The ECB has a fine line to tread, since its forward guidance is out of kilter with the slowdown in…
The recent decline in UK house prices is principally function of Brexit-related uncertainty. You’d have to be mad to buy…
Bavaria goes to the polls next on Sunday (October 14th). Regional elections don’t usually matter much, but this one is…
Rising bond yields might have forced the populist Italian government to moderate its tone ahead of next year’s budget, but…
Sweden’s general election should allow the anti-immigrant Sweden Democrats to take a further step forward. But the centrists will rally…
Europe’s debt crisis led to some meaningful banking sector reforms. Efforts to recapitalise and improve balance sheets by disposing of…
Prime Minister Theresa May has long insisted that the UK would leave both the Single Market and the Customs Union.…
While the approval of the German coalition deal is a positive step for European integration, the uncertainty thrown up by…
The Italian elections are unlikely to deliver a thumping victory to any party. That’ll leave a government with a weak…
To remain as German Chancellor for another term, Angela Merkel has had to make serious concessions. The most important of…
The Catalonian election results won’t weigh on the euro or EU financial assets in the short term. Whether this holds…
The evolution of German coalition discussions leaves us more optimistic on a pro-European outcome. While we don’t expect an immediate…
The surprise collapse of German coalition negotiations leaves Chancellor Merkel stranded. She is now faced with trying to forge ahead…
Borrowing more and drawing down on savings can only smooth the decline in the UK’s living standards triggered by Brexit.…
ECB monetary policy will remain easier for longer, which means an extension of the asset purchase programme (APP) while maintaining…
Spanish PM Rajoy has miscalculated in Catalonia. The independence genie can’t be recorked. This adds a new layer of political…
Politics rarely defines market trends, but it does alter risks in the shorter term. There is a clutch present in…
The CDU’s share of the vote may have shrunk but it remains the dominant party in Germany. This leaves Merkel…
The outlook for the UK economy is fraught with risks. Brexit creates obvious headwinds for consumers and corporations alike. We…
The outcome of the UK election is bad for sterling. We expect it to fall towards parity with the euro…
Emmanuel Macron will become the next French president. He will have unfettered power to relaunch the EU with Germany post…
Our positive view of the Eurozone is predicated upon the rejection of populism in pending EU elections. The political developments…
