Weekly analysis

The health crisis is making a comeback in Europe. The ECB is monetising public and private debt. Capital markets are under control. The agreement of 21 July strengthens the euro. Significant downside risks for equities. Key points Economic downturn in the European Union Germany shores up European growth EU rules on public debt will have [...]

Overly optimistic expectations for US GDP. Growth likely to slow in Q4. Rising budget deficit. Massive and unconditional support from the Fed. High risks for equities. Key points Second wave of Covid-19 could slow US economic recovery Over-optimistic expectations for US GDP? US elections will reinforce the new fiscal paradigm Rising taxes threaten financial markets [...]

Sharper contraction of GDP (-7.9%) and corporate profits (-46%) in Q2. GDP expected to recover in Q3. Profit growth of +21% in 2021. Excessive valuation of the Nikkei. Key points The change in prime minister will have no influence on Japan’s economic policy Japan’s GDP contracted more sharply than expected in Q2 2020 The Japanese [...]

GDP is expected to fall by -32% in Q2, will not return to 2019 levels before 2022. The Fed systematises yield curve control. End of interest rate volatility. Complacency on equities. Key points Annualised GDP contraction of -32% in Q2? GDP contraction of -5.5% in 2020 followed by a +3.9% recovery in 2021 Sharp rise [...]

GDP is expected to fall by -32% in Q2, will not return to 2019 levels before 2022. The Fed systematises yield curve control. End of interest rate volatility. Complacency on equities. Key points Annualised GDP contraction of -32% in Q2? GDP contraction of -5.5% in 2020 followed by a +3.9% recovery in 2021 Sharp rise [...]

ECB injects EUR 1,350 billion. Banks borrow EUR 1,300 billion at negative yields. Debt pooling and monetisation are moving forward. Recovery plan favourable to the euro. Key points ECB is on every front ECB lends banks an additional 1,300 billion at negative yields ECB underwrites the fiscal expansion of European states An 1,800 billion recovery [...]

Brutal economic shock in April. BOE must boost its action. Stability of the pound. Negative UK Treasury yields. FTSE100 benefits from favourable relative valuations. Key points The UK’s economy is headed for the worst economic recession in Europe Intense shock in April, the worst is probably over Exceptional governmental measures for a unique situation The [...]

Slide into recession in Q1. -20% contraction expected in Q2. Record budget for growth. Economic pick-up in Q3. Drop in corporate earnings. Excessive valuation of the Nikkei. Key points Japan’s GDP resisted well to Covid-19 in Q1 Recession is likely to take a turn for the worse in Q2 Record budget approved to support Japan’s [...]

-10% contraction expected in Q2. Economic recovery will take place in H2. SNB will not change course. Weakening of the franc. Gradual rebound of long-term rates. Reduce equity risk. Key points Switzerland’s GDP contracts more sharply in Q1 than experts expected The drop in GDP in Q1 is actually due to only two weeks of [...]

Fundamentals favourable to precious metals. Sharp rise in investment demand. Reduction of the gold/silver price ratio favourable to silver. Palladium benefits from a special situation. Key points Stock market panic temporarily weighed on precious metals in March 2020 Most key factors for precious metal prices are favourable Sharp rise in investment demand 100 million gold [...]