Many economists and currency analysts, after years of ignoring such “old fashioned” indicators, are now talking about the massive trade surplus that the Eurozone enjoys with the world, but in particular with the US.
Poor economic and fiscal policies are, and will likely be, a recurring theme in Italian politics. However, from a trade perspective, we see Italy to remain a good carry/spread trade for at least the next twelve months against a backdrop of improving GDP growth in 2018 and 2019.
Even as the situation in Germany to form a new government is difficult, financial markets have reacted very mildly to the uncertainties.
We think it is unlikely that May will be replaced within her own party. This is because there is a lack of an heir-apparent, and the Conservative Party would be extremely reluctant to even slightly increase the risk of another election.
Despite the uncertainty surrounding the time it will take before the formation of a new government, we do not think there is risk of major policy change in Germany. The election outcome, however, will likely weigh on the aspirations of France’s Macron for deeper Eurozone integration.
Our London-based Global Credit Portfolio Manager lays out the scenarios of the upcoming German election and its ramifications for select German credits.
“ECB rhetoric might waver back and forth, but unless there is a global downturn or a major political revolution in Italy, its monetary policy will become less accommodative...”
John Vail, Chief Global Strategist for Nikko Asset Management, contributes a regular column to Forbes.com
The Global Investment Committee remains moderately optimistic about the global economy and equity markets, while being cautious on global bonds.
Theresa May’s Conservative Party lost its outright majority in last Thursday’s general election. What are the implications for Brexit and the markets?
Our team of our Portfolio Managers in London, one of whom hails from France, reviews the prospects and ramifications of this weekend's French election.