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Fears about the coronavirus in China may keep markets quite jittery next week, with the upside capped for cyclical currencies. The Bank of England won't, we think, cut rates, while the Fed meeting may go down as a non-event. Italian regional election may cause some noise, but we don't think the government will fall
The Federal Reserve is widely expected to leave monetary policy unchanged on 29 January, but with hints of economic softness amongst the equity market euphoria we continue to see risks skewed towards lower rather than higher interest rates later in 2020
As the trade war has dragged on, firms are taking measures to insulate themselves from higher tariffs and uncertainty
Confidence in the Czech economy decreased in January, mainly due to weaker confidence among consumers, where concerns about future economic growth significantly increased. Business confidence broadly stagnated
Long-term trend: Down. 2 year falling trend line will offer resistance around 77.15.
Short-term trend: Up. Consolidating below horizontal resistance around 76.50
Regional elections in Italy on Sunday have shifted the market's focus back to the volatile political landscape. While we think a break-up of the coalition at the national level is not on the cards yet, political risk will remain an important factor driving European markets. We look at what this means for rates and FX near-term, and in the long-run
CDS Performance, Sector Performance and Events Calendar
Euro Credit asset swap spreads and performance
CDS Performance, Sector Performance and Events Calendar. US Dollar Credit asset swap spreads and performance
MHP (B/B3/B+; Net Debt/EBITDA: 2.96x) ceased poultry exports to the EU as of Thursday. The scale of negative impact of the EU ban of poultry imports from Ukraine will depend on the length of such a ban and whether other countries follow the EU and close their markets to Ukraine. A full-year EU ban could knock off up to 12-13% of the company's EBITDA, but we don't see this scenario as likely. MHP's issues with EU exports may trigger investors to switch to another Ukrainian-based corporate, Metinvest, with Eurobonds being traded wider than MHP. See full article below.
While the latest PMIs probably aren't quite as make-or-break for policymakers as markets have made them out to be, the post-election improvement adds to the body of evidence suggesting sentiment has picked up in the new year. We think the Bank of England will keep rates on hold next week
The composite PMI remained unchanged at 50.9, but there is enough in this release to start the year with some moderate optimism.
The weekly close above the horizontal resistance barrier around 163.40, February this year, resulted in a resumption of the long-term uptrend. Prices topped around 178.80 in the beginning of September, showing a pull-back within the long-term uptrend. The close below the 12 month steep rising trend line around 173.95 in the second half of October, is confirming the consolidation within the long-term uptrend. There remains a possibility of prices breaking below the crucial support in the weekly chart between the EMA-40 line at 171.51 and the horizontal line around 170.25 in the search for a bot...
Econocom: Leasing shrinks further, REBITA and FCF miss but disposals stabilize net debt.
Food retail sector: Carrefour 4Q19 sales statement
ECB review of monetary policy expected to conclude by the end of 2020
The news about more people being infected by the coronavirus in China contrasts the Chinese Government's decisive steps to control the outbreak and the WHO refraining from calling the virus an international emergency for now. On balance, this is averting another risk-off run for now, but with the holiday season for the New Year in China kicking off, worries about the potential backlash on the Chinese economy persist. Turning to the US calendar, Markit will release PMIs today. These are unlikely to have a material impact on the dollar, which should retain its resilience going into the weekend.
Overnight: In an interview, Lagarde sought to dispel the impression that the strategic review would grip ECB decision making this year.
Your daily roundup of commodities news and ING views
The multiple challenges in the food retail sector have had a negative impact on credit metrics across all the names in our valuation. And we believe this trend reflects the deteriorating profitability of the business models due to the intense competition, the change in consume