Highlights The valuation discount on Italian banks still seems insufficient for the sector's excess NPLs. We expect a better long-term buying opportunity sometime next year. Stay underweight the MIB and IBEX versus the…
The previous Insight showed that businesses remain a weak link for the banking sector, as C&I loan demand has cooled and the corporate sector is the primary source of credit quality concerns following the multi-year credit binge. As…
The scope of the revaluation in banks stocks on hopes for reduced regulatory constraints and the modest yield curve steepening has surprised us, but it would be dangerous to equate share price strength with the perception that…
Highlights Duration: An easing of financial conditions is likely necessary for recent improvements in U.S. economic growth to continue. As such, the uptrend in Treasury yields will pause in the near-term before resuming early next year…
After the Trump election victory, we immediately upgraded our financial sector view to neutral to protect against the benefit of rising interest rates and the potential for a clear asset preference shift in favor of stocks over bonds.…
Highlights ECB QE has pushed the euro area's Target2 banking imbalance to an all-time high. Thereby, QE has raised the cost of euro break-up. The ECB must dial down QE because the Target2 banking imbalance is directly related to…
The financials sector has cheered President-elect Trump's anticipated policy changes as if they will all be enacted within very short order. While the yield curve has steepened modestly, the widening pales in comparison with the…
Highlights Eurostoxx600 outperformance versus the FTSE100 reduces to: will the euro weaken against the pound? Stay neutral in the Eurostoxx600 versus the FTSE100. Eurostoxx600 outperformance versus the Nikkei225 reduces to: will the…