Eurozone still lacks a stable form of fiscal and banking union
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Improving growth momentum in emerging markets
A closer look at the European fiscal and banking union
The most important and potentially fatal flaw in the EMU fundamentals is the incomplete nature of its institutional design. In particular, the stability of the region would be greatly enhanced if there were a Eurozone Treasury to manage part of region wide public expenditure and perform a regional stabilisation function.
Fundamentals have to take over to extend the rally
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Overbought levels in equities and real estate
Investors may be too complacent
Investors turned from overly pessimistic to optimistic in less than a month time. After the recent rally we see overbought levels in equities, while companies are cautious in their outlook. Hence, we do not increase risk in our portfolios and stick to our small overweights in equities and spreads, with a focus on yield.
Flatter yield curves for government bonds in Europe and US
Yield curves for German Bunds as well as US Treasury bonds have flattened noticeably in recent years. For Bunds, the front end of the curve has moved significantly below zero.
Important days ahead for the financial sector in Europe
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Better-than-expected corporate results, especially in cyclicals, but the outlook is cautious reflecting macro uncertainty
Are we approaching a turning point in the role of government bond yields as a driver for equities?
The post-referendum rally continued over the past week. Although important regional differences exist, global equities are up 4.5% since June 23, the day of the UK referendum. A large part of this performance was driven by a weaker euro.
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