David A. Meier (Julius Baer) | Prime Minister Johnson’s Conservative Party grabbed a commanding victory. An orderly Brexit based on the withdrawal agreement is highly likely on 31 January. Given plenty of looming uncertainties during the transition period, such as the final UK-EU trade relationship and Scottish appetite for independence, we stick to a Neutral short-term British pound outlook.
Christine Lagarde gave her press conference as the head of the ECB yesterday. While alerting of the risks that the eurozone is facing, she promised to maintain both the official rates and the monetary stimuli of her predecessor Mario Draghi. However, the market’s focus was on the announcement of a broad “strategic review” of the ECB’s monetary policy, the first since 2003. This was interpreted as a possible change in the ECB targets, including inflation below 2%. Banks bounced with over + 3%.
If the Conservatives return to power with a large majority in the UK elections, UBP analysts anticipate the new government will engage in a large scale fiscal stimulus and UK assets will experience a relief rally.
Morgan Stanley | Global refinery margins have fallen sharply this year and we think we are going to see a rebound in 2020 for a host of reasons: the price of HSFO has fallen to a level where it already competes in power generation, which limits its fall from these levels.
DWS | Although many experts accuse central banks, private sector savings and investment trends are equally important. Eurozone sovereign debt yields have rebounded since the August lows but remain firmly anchored in negative territory. The question is not whether the ECB will raise its interest rates again but how to create an environment in which companies are willing to invest to generate profitability and that part of that profitability returns to the lenders.
“If the conservatives of Boris Johnson obtained the majority in the Parliament, the agreement of exit of the prime minister would return to the agenda of the new House and probably it would be approved. The United Kingdom will then begin the transition period (which in principle extends until the end of 2020) during which the future relationship with the EU will be defined,” analysts at Degroof Petercam point out.
Bank of America | We think that the next decade in Autos will be all about electrification (global CO2 targets), slower car sales growth, mobility services and a greater focus on cost reforms (material costs, capacity rationalization & personnel costs). Following two years of declining global car sales, we think 2020 could see flat growth. However, we do not believe that this will be enough to offset cost pressures in an industry burdened by high fixed costs (labour) and rising regulatory charges (CO2).
Nicola Mai and Peder Beck-Friis (Pimco) | We believe that negative policy rates could do more harm than good to economies and markets, due to their impact on banks, insurance companies and pension funds, and also a possible adverse effect on consumption. Below, we discuss potential implications for investors.
Santander Corporate & Investment | Waiting for PMI business confidence indicators to show signs of substantial improvement and in the absence of developments in trade negotiations, interest rates on government bonds have receded slightly, which has again given prominence to defensive companies while cyclicals take a break after the rally that began in September.
José A. Santos (Patrivalor) | The stock valuation of the 60 Spanish companies amounted 609.718 billion euros at the end of November 2019, which represents an increase of + 8% compared to the end of 2018.