Francia

Political instability combined with the maths of debt sustainability is much more concerning in France than in either the UK or the US. Go long UK gilts versus French OATs and go tactically long GBP/USD.

France finds itself in a unique, thorny situation. Can it heave itself out of it? And what does it mean for investors? 

Germany’s economy has lagged that of the rest of Europe for nearly 10 years. So have German stocks. Investors are extrapolating these trends to bet on the country’s deindustrialization. Could Germany manage to beat dismal expectations?

Yesterday, the ECB solidified its recent dovish tilt in response to weaker growth and decreasing inflationary pressures. It is now set to cut rates 25bps each meeting. How low will the ECB deposit rate ultimately go and what does this imply for yields and the euro?

The real threat to European equities is growth, not political risk. How low will Eurozone earnings fall during the coming recession and how much will equities decline in response?