The VP Research Blog
A blog about financial markets and the VP investing framework
Engines of Global Growth Keep Recovery on Track
Excerpt from November 10th: The US and China are the current engines of growth, keeping the global recovery on track. A vaccine only reinforces the recoveries in China/US, and should eventually put Europe back on a stronger footing The three main engines of global...
ECB May End up Absorbing all Government Supply in 2021
The ECB has provided a clear indication that additional stimulus will come in December. A further expansion of PEPP could result in the ECB purchasing most, if not all, of the EGB supply in 2021 Although the ECB left the monetary stance unchanged at their last...
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...
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...
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...
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....
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...
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...
What They Will Do vs What They Should Do
Governments are becoming very concerned about the resurgence in virus cases seen since summer. In context, the rise in cases should not be too alarming. More testing means more cases will be found, and the relatively high false positive rate for the most common tests...
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