Mexican equities and European bank stocks have been trading in close tandem, indicating that common shocks are driving them both. For now, each of those markets continue to trade at very depressed levels. Funding stresses…
The Swiss National Bank has once again been pushed into a corner. The rise in economic stress and risk aversion caused by the COVID-19 shock has created a sea of inflows into Switzerland out of the euro area. As a result, the…
Highlights Inflation-Linked Bonds: The plunging price of oil has put renewed downward pressure on global bond yields via lower inflation expectations. With oil prices set to recover over the next 6-12 months as the global economy…
The EUR/JPY cross’s incapacity to break down below 115 when global markets seized up last march caught our attention. Now that the BoJ and the ECB have a similar level of interest rates and that the yield spread between…
Yesterday, BCA Research's European Investment Strategy service concluded that if social distancing persists, then AI will only further disrupt the labor market. This is because once an industry has already shed many workers, it is…
Highlights Social distancing makes it impossible to do jobs that require close personal interaction, yet these are the very job sectors that have kept jobs growth alive in recent decades. If social distancing persists, then AI will…
In April, European consumer confidence computed by the European Commission plummeted to its lowest level since the depth of the European debt crisis in 2013. This augurs poorly for retail sales, which are likely to plunge in a…
The Current Situation component of the German ZEW survey collapsed to -97.5 in April, its worst reading since the post-GFC recession. However, the Expectations components of the German and Eurozone surveys, rose from -49.5 to 28.…
The 10-year yield spread between US Treasurys and German Bunds has quickly narrowed, falling by 170bps from a higher of 279bps in November 2018. Despite this sharp narrowing, the spread remains elevated by historical standards,…
In March, European car registrations collapsed 55% on an annual basis. This indicates that European growth will be extremely negative in Q1 2020. While this contraction is stunning, it is a logical consequence of lockdowns: very…