Euro area : decline in PMIs underscores downside risks

The November composite PMI surprisingl y declined against expectations of a stable reading. The negative surprise c ame mostly from a drop in services sector sentiment , though manufacturing sentiment also recorded a small decline. While these figure s should not be taken at face value, they nevertheless reflect the growing downside risks to the euro area economy.

Cold wind blowing across Europe

Since Donald Trump’s election, a cold wind has been blowing across Europe with disappointing macro figures and fears of a renewed trade war. At the same time, the heightened tensions between Russia and Ukraine are further weakening risk appetite in Europe. On the interest rate front, the divergence in monetary policies is accelerating (ECB rate cuts priced in at -39bp for Dec. 24). On the stock market front, the Euro Stoxx 50 posted its sixth consecutive week in the red, while US indices held up...

Un vent froid sur l’Europe

Depuis l’élection de D. Trump, un vent de froid souffle sur l’Europe avec des chiffres macro décevants et des craintes autour d’un regain de guerre commerciale avec la prochaine administration américaine . En parallèle, le regain de tensions entre la Russie et l’Ukraine fragilise encore plus, en relatif, l ’appétit pour le risque en Europe . Côté taux, la divergence de politiques monétaires s’accélère (-37 pb pricés pour Déc-24 pour la BCE). Côté actions, l’ Eurostoxx 50 signe une 6 ème...

Bangladesh’s economic miracle is fading due to excessive debt burden a...

It has been over 100 days since Bangladesh’s former PM Sheikh Hasina resigned after weeks of protests. An interim government has since taken office, led by Chief Advisor Muhammad Yunus, an economist and Nobel laureate known as “banker to the poor.” This interim government is on a mission to stabilize the battered economy. In this note, we review the latest economic developments in this country to conclude that the situation is becoming more fragile, especially given the heavy debt burden, notwit...

NATIXIS China Corporate Monitor 2024 - Pressure in profitability can f...

Chinese corporates have been suffering from weak economic growth with pressure on profitability. After the frenzy and cool-down in China's stock markets following the hype of stimulus, corporate performance may improve if the RMB 10 trillion clean-up plan successfully repairs local government balance sheets and boosts confidence. Despite a more accommodative policy stance, credit risks stay elevated illustrated in the higher share of zombie firms. Externally, China will face greater external hea...

EUR/USD breaks below 1.05

Will France have a government (and a budget) for Christmas?

The far-right National Rally threaten ed to bring down the government by year end . Ms Le Pen, the National Rally leader , stated that some “red lines” have been crossed by the government , especially regarding concerns over household s’ purchasing power that are not included in the 2025 budget. P rime M inister Barnier indicated he will “likely” use article 49.3 to pass the budget ( ie without the vote of the Parliament ) between December 18 and 20 . W e thus ...

EUR/USD sous 1,05

Just 2% headroom

A 2% près

孤立するショルツ

Trump 2.0: Economic implications of projected policies

The election of Donald Trump represents what could potentially be a sea change in policy. His extreme positions on trade and immigration could have profound effects on the US and global economic outlook if implemented as promised. The direction of his key policies is clear for tariffs (higher), immigration (lower), and taxes (lower), but how and when these polices are enacted are open questions. Trump’s campaign rhetoric was instructive to determining his governing priorities, but we think ...

Markets have sights firmly set on NVidia earnings

Les résultats trimestriels de NVidia dans le viseur des marchés

中国はトランプ勝利に平静を装うも、警戒している

US financial assets come out trumps

Une surperformance US

: Corporate hybrid debt methodologies: S&P strikes back

Last 13 November, S&P issued a Request For Comment (RFC) whereby the rating agency is proposing changes to how it classifies equity content in certain hybrid debts featuring sliding step-up clauses . For the concerned instruments, equity treatment would move from 50% to 0%. In its RFC, the rating agency mentioned “ about 5 issuers ” / “about 10 instruments ” concerned. For the circa 5 issuers concerned, S&P does not expect any immediate rating impact. We see EDP most exposed ...

Underperformance of US credits & low-betas (swap spread effect again)

Swap spread compression and the fading Trump trade Another week of swap spread compression to record levels ( -6 pb on the 10Y, +3 bp on the 5Y, i.e 4 bp weekly compression) has weighed on € low-beta credit spreads again : +4 bp vs swap for € Corp non-financial senior, +3 bp for € Covered bonds, +2 bp for € bank senior iBoxx indices As the Trump trade has faded, the assets having benefited the most from it the 1 st week after the US election were the ones to suffer last ...

Markets caught between Trump and an off key macro