45.6% of Eurozone’s corporate debt is BBB
The quality of corporate debt in EMU is deteriorating, data from the ECB point out.
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The Corner
A weak USD may signal a shift to non-US equities
As Peter Kinsella, UBP’s global FX strategist highlights, the US dollar bull market has likely run its course as we enter 2020. Indeed, since 1995, long-cycle inflections in the US dollar exchange range have coincided with long-cycle under/outperformance of US equities relative to non- US equities.
Brussels believes the extension of budget poses a risk for Spanish debt reduction
BancaMarch | The European Commission warns that Spain is moving away from the adjustment path and asks for measures that compensate the alignment of pensions with prices.
Car registrations in Spain fell 6.3% until October
In October, car registrations in Europe reached 1.21 million units, representing an increase of 8.6% year-on-year.
EU residential real estate: prices may remain strong in Germany, but should slow down in France
Credit conditions (credit volumes and mortgage interest rates) have generally contributed significantly to price increases, while economic growth and inflation have been a consistent, although less important, factor, researchers at Edmond de Rothschild point out.
Current account deficits in EU countries: Boon or burden?
Several European countries are running current account deficits, “an indicator that tends to be seen as negative, although they can’t necessarily indicate something worrisome,” says Levon Kameryan, sovereign rating analyst at Scope Ratings.
The transition from fossils to renewables and its impact on consumer prices
Roula Inglesi-Lotz and George Alex Thopil (The Conversation) | The transition from fossil fuels to cleaner energies is a global pursuit. But it’s faster and more intensive in some countries than others.
Endesa continues to pay a premium against the sector: EW (O.P. at € 25.20)
Morgan Stanley | We continue to see the discount with the quotation exaggerated against the sector (8-9% PER’20-21), by undervaluing its strong growth profile (growth in EPS CAGR 18′-21 ‘of 10%), as well as the expected new renewables plan, so we continue to maintain the OW.
European banks – don’t fear the Libra
BOAML | For a while, we’ve been asked by clients how “big tech” might compete with the European banks. This question now seems to need an answer. We think the European banks sector faces plenty of challenges, but a head-on challenge from the likes of Amazon and Google etc aren’t among them, in our view.
What recession?
Jessie J. (Unigestion) | Growth drivers have stabilised considerably since June, following the end of the slowdown that started in January 2018. The “mid-cycle” pause called by Fed Chair Jerome Powell has led to a one-of-a-kind situation: world growth remains decent while monetary policy has become once again incrementally more accommodative.