The VP Research Blog

A blog about financial markets and the VP investing framework

Hidden Risks from ECB’s Pandemic Tools

The ECB’s policy response to the Covid crisis has been game changing, but has also added to the list of risks that undermine financial stability. The disruption to wholesale bank funding is a case in point In the midst of an unprecedented economic contraction, it is...

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Steeper and Cheaper

While further gains will be harder from here, indicators continue to point to a supportive backdrop for yields and the yield curve, with the latter historically tending to steepen through US elections In our October monthly report (The Case for Banks - October 8th...

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Elections Come and Go

The US presidential election on Tuesday is currently the number one event risk for US equities.  But investors should focus on two more important underlying themes: positioning and reflation. Markets haven’t whole-heartedly embraced the reflation trade as money...

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Don’t Fear the Rise in Yields

The last few weeks have seen US yields breakout to the topside of the tight range they have been trading in. The market narrative is that yields have been boosted by more clarity on the US election - a Democrat win with a mooted $3.5 trillion stimulus package in the...

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Too Big to Care

The antitrust report published last week by a House of Representatives subcommittee has set the wheels in motion to tackle anti-competitive behaviours in Big Tech. We think it has little immediate effect for investors today, but the risks are mounting....

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Turkey and Hungary’s Harbinger Hikes

Given the scale of demand destruction in the wake of the global health pandemic, central banks should be nowhere near tightening monetary policy. For those that are, policy rate hikes are indicative of intensifying currency stresses and risks of a destabilising...

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ECB’s Focus Shifting to Bank Lending

The ECB has repeatedly stressed the primacy of its PEPP asset-purchase program in tackling the economic impacts of Covid, despite the importance of the bank-lending channel for the European economy, given the high degree f financial intermediation. The decision taken...

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