Highlights With a vaccine already rolling out in the UK and soon in the US, investors have reason to be optimistic about next year. Government bond yields are rising, cyclical equities are outperforming defensives, international stocks…
The European Central Bank (ECB) followed through on messaging that it would “recalibrate its instruments” in order to stimulate further amid renewed weakness in Europe. As expected, the central bank expanded the…
The performance of the Eurozone’s banks relative to the broad market follow the evolution of European inflation expectations. This relationship reflects many links. First, higher inflation expectations point toward higher…
The euro area is likely to experience a contraction in economic activity in the 4th quarter of 2020, but there is hope this deterioration is already passing. The decline in activity highlighted by the Google Mobility…
BCA Research’s Foreign Exchange Strategy service concludes that the DXY should hit 80 in 2021, which implies a euro towards 1.35. Over the last few years, the relative growth performance between the Eurozone and the US…
Spanish utilities surged 13-folds relative to Spanish financials between 2009 and October 2020. This incredible outperformance was rooted in many factors. Over this period, relative forward earnings increased 6-folds. Utilities…
Risky asset prices rose very significantly in November, in response to the discovery of multiple effective and apparently safe vaccines. But as investors have continued to digest the vaccine news, Europe and the US have been…
With headline HICP inflation still negative in three of the four largest euro area economies, preliminary estimates for November continue to suggest a complete lack of inflationary pressure. German harmonized inflation fell…
Mr. X and his daughter, Ms. X, are long-time BCA clients who visit our office toward the end of each year to discuss the economic and financial market outlook for the year ahead. This report is an edited transcript of our recent…