The EU’s €750 billion recovery fund can be considered a major political achievement for the bloc. It’s good news for investors too, as the announcement helps to contain EU break-up risk as a result of Covid-19.
The plan has also received a positive reaction from green investors: the recovery fund can direct resources not only to hard-hit sectors, but also to sectors not directly affected by… Read the article
All eyes are on central banks these days as major monetary policy decisions have been driving global bond markets. The eagerly awaited September meeting of the Governing Council of the European Central Bank (ECB) has given bond investors much food for thought. In particular, the new round of its asset purchase programme (APP)—announced in true ECB fashion revealing only the bare minimum of de… Read the article
Compared to one and a half years ago, when the prevailing narrative was still revolving around global synchronised growth, the economic outlook for Europe has darkened significantly. From ‘peak optimism’ levels in late 2017, Euro area real GDP growth has slowed to 1.2%, while Eurozone manufacturing PMI has dropped by more than ten points. Even the notoriously optimistic ECB eventually had to co… Read the article
Inflation expectations in the US and Europe have been diverging lately and it comes as no real surprise, of course. After all, annual GDP growth in the US was running at a healthy rate of 2.6% in real terms in Q4 2018. The unemployment rate has fallen below 4%, putting upward pressure on wages, while economic sentiment indicators, such as PMIs, are in firmly expansionary territory. In stark con… Read the article
Spanish government bonds have outperformed their European peers so far this year. How has the country changed from being near a European Union bail-out only a few years ago to its present, more solid state? Watch M&G Investment Director Ana Gil explain it.
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This has not been a vintage year for total returns in the European High Yield market: wider spreads have led to small capital losses, barely offset by a relatively low income of 3.2%, which has resulted in an anaemic total return of 0.22% year to date. Unexciting and dull? Yes, but only if one looks at the surface. The underlying trends are far more interesting – and relevant for investors.
Eve… Read the article
Veronique Chapplow and Ed Booth
Ten years after the collapse of Lehman Brothers, US banks have gone from strength to strength whilst European banks have been losing ground and are trapped with low returns. Ed Booth, banking analyst at M&G’s equities team, talks to Investment Specialist Veronique Chapplow to discuss why US banks have become attractive earnings compounders and why their European … Watch the video
After the surprise election result, market reaction within the European high yield market has been surprisingly muted. Here are a few key moves that show how the news is being digested.
In general, the market seems to be pricing in little to no impact for European risk premia, and even for the more potentially directly impacted companies in Latin America, the re-pricing has been very mild.
It … Read the article
Expectations are high that European Central Bank (ECB) president Mario Draghi will announce additional easing measures at the next monetary policy meeting on Thursday this week. If the ECB decides to provide further stimulus via extended (or expanded) QE and/or lowers its negative deposit rate further, the Swiss National Bank (SNB) has some thinking to do. I am probably not the only Swiss perso… Read the article
It has been difficult to filter through the noise of the Greece situation these past few months. But when you stop and have a look at the economic backdrop, things don’t look as bad as some of the alarming headlines might have you believe. Some significant economic headwinds have turned into tailwinds, which will likely drive European growth for the next 18 months.
1. The Euro
In April, the Eu… Read the article