Dear client, In addition to this week’s abbreviated report, we are also sending you a Special Report on currency hedging, authored by my colleague Xiaoli Tang. Xiaoli’s previous work mapped out a dynamic hedging strategy for…
Euro Area retail sales collapsed in January, falling 5.9% m/m, disappointing expectations of a much more muted 1.4% m/m decline following a revised 1.8% m/m increase in December. Details from the report show a sharp 12% m/m…
Preliminary figures show euro area inflation steady in February, marking the second consecutive monthly foray above zero after prices declined in the prior five months. The headline figure was unchanged at 0.9% y/y, while core…
Highlights Rising Global Yields: The increased turbulence in global bond markets is part of the adjustment process to a more positive outlook for global economic growth. Rising real yields are now the main driver of nominal yield…
Central banks are becoming uncomfortable with the recent global yield moves. For example, many prominent members of the European Central Bank Governing Council are already suggesting that the ECB could increase the size of its…
Highlights Market-based geopolitical analysis is about identifying upside as well as downside risk. So far this year upside risks include vaccine efficacy, coordinated monetary and fiscal stimulus, China’s avoidance of over-…
Highlights The pandemic is not yet over, but it appears that infections have peaked in the developed world and in most of the major developing economies. Economic growth will reaccelerate as social distancing abates and vaccination…
Despite large net-long speculative positions in EUR/USD and a substantial decline in German 5-year/5-year forward real rates relative to the US, the euro only softened marginally in the past two months. The euro’s resilience…
The Germany IFO Business Climate Indicator for February surprised to the upside, indicating a marked improvement in sentiment. The headline indicator increased to 92.4 from 90.3, versus expectations of a marginal uptick to 90.5.…
February’s reading of the ZEW Indicator of Economic Sentiment for Germany shows a surge in optimism about the economic outlook. The expectations index jumped nearly 10 points to 71.2, significantly beating consensus…