The Quiet March of Financial Repression

Even when the world eventually recovers from lockdown, financial repression will remain a dominant feature of developed-market economies. While markets are immediately focused on how and when economies can escape lockdown, the structural shift towards financial...

Surge in EGB Issuance May Result in Lower 2H20 Supply

January is typically a very busy month for European sovereign issuance as national treasuries kick off their annual funding programmes. This year has seen a marked uptick in supply relative to the previous year as issuers have taken advantage of low borrowing costs to...

Outlook stable for Europe and UK consumer

With global trade headwinds intensifying and many governments still reluctant to turn on the spending taps (for now), the burden of growth remains with the consumer. In the eurozone, consumer conditions appear relatively mixed. There is a divergence between soft and...

Early Indicators of SNB Intervention

We previously highlighted the significance of the 1.10 level for EURCHF – a level which would likely trigger intervention from the SNB. The central bank has previously sought to weaken the franc when EURCHF has been below this level and, despite an arguably weaker...

Early Signs of Greek Rebound

Another new era dawns for Greece after voters rejected the incumbent hard left Syrzia government at the July 7 general election and voted in the centre-right New Democracy. The economy also, finally, appears to be turning a corner. The Greek treasury tapped a 10-year...

Norges Bank running out of tightening room

At a time when market expectations of G10 monetary policy are rapidly shifting in the direction of fresh policy easing, Norway is a clear outlier. The Norges Bank hiked the deposit rate by 25bps last week and has alluded to the possibility of further hikes going...

Market Pricing Restart of ECB QE

The apparent de-anchoring of market-based inflation expectations has started to rattle the ECB and has raised the spectre of a return to monetary easing, mirroring the abrupt shift in marketimplied policy rate expectations in the US where 65 bps of cuts are now...

Negative-yielding debt suggests overextension

Over the last nine months the outstanding amount of government bonds worldwide with negative yield has increased by $5.4trn to $11.7trn (using the latest daily estimate), homing in on the $12.2trn record set in June 2016. The majority is accounted for by Japan,...