European economy

european dominos

“Europe Is The Place To Be This Year”

T. C. | “Europe is the place to be this year. That at least is what Morgan Stanley analysts say: “With economic momentum improving (and with a three-year visibility), strong earnings growth, lower relative valuations, tighter investor positioning, US flows growing, buybacks at lows and improving, positive inflation effect, Bunds yields at 0% and the Recovery Fund, could see Europe beat all regions for the first time since 2000 (being…

stoxx600 portada

Euro Stoxx 600: Earnings Per Share Up 90%.

T.C. | The quarterly corporate earnings season is now in its final phase, both in Europe and on Wall Street. And the season can be described as excellent, with most companies outperforming analysts’ expectations and being very positive about the future of their businesses. So far, 91% of the S&P500 has reported, with 77% of companies beating market estimates in Revenues, (+12.9% vs +8.6% expected by the consensus). Meanwhile, 87%…

cosecha aceituna

Challenges For Europe’s Olive Oil Producers Continue To Stack Up

European Views | The third European conference on Xylella Fastidiosa last month brought together scientists from more than 60 countries to address the disease that become an existential threat to olive trees across the continent and to the European olive oil sector, which generates more than €5 billion a year and represents 67% of the world’s supply. This fatal plant disease, which hit particularly hard during 2020, tops off what…

Cryptocurrencies like bitcoin have grown in popularity

Growth Of Crypoassets Does Not Threaten EU Banking Sector

Sam Theodore ( Scope Ratings) | Banks and investors are apprehensive that the growing presence of crypto assets (CAs) could shake the edifice of European banking, impacting core activities like lending, deposit taking, trading, and investments. Those concerns may not be entirely misplaced, especially for banks that are digital laggards, but they are for the sector in general. I am less concerned when it comes to banks that have made…

colonial pipeline

Cyberattack On Largest US Oil-Products Pipeline: We Could See Europe Start To Ship Gasoline To The US

Aneeka Gupta (Wisdom Tree)| Colonial Pipeline Co., a supplier of gasoline, diesel, and jet fuel to the eastern US, was forced to halt operations on Friday owing to a ransomware attack that affected some of its IT systems. If the outage were to last for an extended period of time it could have far reaching effects on the oil markets extending beyond the US and impact Europe as well. In order to plug the shortfall in gasoline in the US East Coast we could see Europe start to ship gasoline to the US.

eurozone labour market

The Eurozone’s Labour Market: Large Inequalities Between Sectors

At first glance, the “scar” on total employment looks set to be less deep than after the 2008 financial crisis. However, at the sectorial level, the shock may turn out to be deeper or longer lasting. One example is tourism, one of the sectors most affected by the pandemic and one of the most labour-intensive. These sectorial divergences may have consequences for the pace of recovery in European countries depending on their degree of exposure to tourism.

Eurozone housing prices

European House Prices: Time For Regulators To Hit The Brakes?

Scope Ratings | European house prices increased on average by 6.2% in 2020. That was twice the annual rate of the last decade and even higher than growth in the economically very favourable last five years. Few banks have so far amended their underwriting criteria and, in most countries, previous macroprudential measures have been reduced and/or halted. As such, this may be the right time for regulators to become proactive.

dollar rally

While Europe Is Expecting An Inflation Peak Of 2.5%, The US Is Talking About 4.1%!

Mutuactivos | How would you react to an inflation figure of 4.1%, albeit temporary? In short, we believe that it could push the T-note above 2% temporarily, even a scare in the markets, but in that case it is likely that the Fed would try to influence it to moderate it: either by changing its “active passive” discourse to one of greater involvement, closer to that of the ECB, or directly by buying debt to control the yield curve.