MADRID | By Francisco López | Investors keep betting on European actives, even though the eurozone economies are facing some serious problems: deflation risk, unemployment records and even a possible war in Ukraine. Why does the European stock exchanges dominate analysts’ recommendations?
By David Denton via The Richter Scale | For anyone who was growing up in the 1970s there is a short list of things that one has to be concerned about: The music of The Bay City Rollers, the instant pudding – “angel delight”, playing rugby against the Welsh and inflation. Although the oil price shocks affected all industrialised economies inflation had a particularly severe impact on the UK, we quickly became known as the sick man of Europe.
LONDON | By Michael Gavin at Barclays | The recent decline of headline and core inflation in the US and Europe has intensified interest in the economics of deflation, particularly the perceived danger that Europe may be headed for a deflationary episode. Deflation is particularly unsettling for many policymakers and market participants because of the theoretical risk that it may render monetary policy ineffective, creating a ‘liquidity trap’ from which it may be very difficult to escape.
MADRID | By JP Marin Arrese | Prices like the weather inescapably lead to widespread demurral. They always look either overly hot or unduly cold. Yet the current debate on potential deflation seems largely shrugged off in Spain, even confronted with a CPI dwelling in minus territory. A predictable reaction in a country that scores a solid record of relentless price hikes.
LONDON | By Barclays analysts | Under our macroeconomic scenario of a mild and uneven recovery combined with subdued inflation, we do not expect the ECB to cut rates further in the coming months despite recent speculation (Bloomberg news) that it was considering a negative deposit rate.
Report by Renta 4 European markets open lower (Eurostoxx futures down 0.5%, S&P futures up 0.6%, Nasdaq futures up 1.5%) whilst Asian markets close higher (Japan’s Nikkei up 1.7%, South Korean Kospi up 1.3%) and news that Trump has signed the memorandum of understanding (following rumours of a possible delay until Wednesday) to end the war with Iran and reopen the Strait of Hormuz, bringing forward the timetable for the…
This Thursday marks three months since the start of the Iran war, whilst peace negotiations continue – negotiations that do not appear to be bearing fruit. Meanwhile, the energy crisis continues to take its toll on the global economy. In fact, Scope Ratings forecasts that “the price of oil will average around $100 per barrel in 2026 and that, from then on, it will fall only gradually, remaining in 2027…
Jefferies | Impressive Q3 results… with group sales/EBIT of €9.81bn/€2.37bn (cons €9.71bn/€2.25bn) for Aug-Sep, this for ex fx growth of +8.4% (versus cons of +7.8% and buyside apparently somewhere between 7% and 8%) which follows the 9% of current trading disclosed for 1-Aug to 8-Sep. Gross margin landed at +79bps year-on-year to 62.2%, versus cons/JEFe of +8bps/+55bps. EBIT margin progress was good (in light of fx sales dilution of -3.5%…
Deutsche Bank | In recent years, steel stocks have been affected by weak demand, import pressure and political headwinds, and although fiscal spending and interest rates could provide support, we remain cautious on demand. However, the European Commission’s (EC) plans to significantly strengthen trade protection point to a significant shift towards a more steel-friendly industrial policy. If these measures are implemented, even partially, steelmakers are likely to return to an…
Bankinter | Manufacturing activity falls more than expected in October in China. Manufacturing PMI: 49.0 points versus 49.6 expected and 49.8 previously; Services PMI 50.1 versus 50.0 expected and Composite PMI 50.0 versus 50.6 previously. Analysis team’s view: Weak figures. Manufacturing activity lost momentum in October and entered contraction territory (<50 points). This is the lowest figure in the last seven months and reflects that the impact of tariffs is…