Highlights Achieving 2 percent inflation, whether as a point-target or as an average over time, will continue to be a mission impossible. As central banks continue to push the monetary policy pedal to the metal, it will underpin the…
The 10-year underperformance of Swedish equities relative to US ones is advanced and the Swedish stock market should generate a strong outperformance over the coming years. Swedish equities are extremely pro-cyclical, and the…
The European Central Bank has little scope to push German, French or Dutch yields much lower from current levels, especially as markets are already convinced that the ECB will not be able to raise interest rates for many years.…
Highlights ‘Value’ sector profits are in terminal decline. Bank profits are in terminal decline, because private sector credit is now ‘maxed out’, and the intermediation between borrowers and savers can be done…
Highlights Negative Rates: The persistence of the COVID-19 pandemic is intensifying pressure on policymakers in many countries to provide more stimulus. The odds that a new central bank will join the negative policy interest rate club…
Yesterday’s Ifo survey of German Business Confidence was promising. The business climate index rose for the fourth consecutive month in August to 92.6, topping the 92.1 consensus forecast. The current assessment component…
The August flash estimates of the European Composite PMI declined significantly, from 54.9 to 51.6. This slowdown mainly reflected a sharp dip in the Services PMI from 54.7 to 50.1. The contrast with the US is stark. The US…
The second wave of COVID-19 infections in the US has been disasterous, but new cases seem to have peaked around July 16th. Meanwhile, the second wave of infections is currently gathering steam in Europe. This differentiation will…