Italy under pressure but we expect the spread to core EU and the periphery to stabilise
|
|
- Jeffery Owens
- 5 years ago
- Views:
Transcription
1 Investment Research Italy under pressure but we expect the spread to core EU and the periphery to stabilise Jens Peter Sørensen Chief Analyst May Important disclosures and certifications are contained from page 8 of this report.
2 The vicious circle for Italy we are still far from the scenario where Italian banks lose access to the ECB Fiscal expansion by the new Italian government We never got to this stage back in , when 10Y Italy was > 7% Loss of access to ECB funding for Italian banks Warning by the EU and EU commission of the debt and deficit Unsustainable public sector deficit downgrade Junk rating The Italian government ignores the EU and market pressure Source. Danske Bank Significant increase in the funding cost of the Italian government Downgrade by the rating agencies 2
3 Significant pressure on Italian government bonds The proposed fiscal easing by the new Italian coalition government and a Prime Minister with limited political experience have put significant pressure on Italian government bonds. Furthermore, comments that the new coalition government will not bow to market pressure have added to the turmoil. Finally, comments from the French Finance Minister, as well as Fitch, that Italy should stick to its budget commitment are also putting pressure on Italian government bonds. The EU/EU commission will not accept an unfunded fiscal easing by Italy, which would violate the Maastricht criteria. We are still very far from a downgrade by the rating agencies and in our view it is most unlikely that all four ratings agencies would downgrade Italy to junk status (see the rating outlook on page 3). Furthermore, the Italian investor base has a strong home bias as shown on page 4. We currently have a long position in the 5Y Italy versus 2Y Germany. This has underperformed significantly since last week. We keep the trade on even though the performance has been very negative since early last week. The 10Y yield spread France vs Germany and Italy vs Germany bp 10Y France versus Germany (l.h.a.) 10Y Italy versus Germany (r.h.a.) 10 Sep-15 Dec-15 Mar-16 Jun-16 Sep-16 Dec-16 Mar-17 Jun-17 Sep-17 Dec-17 Mar-18 Source. Danske Bank
4 Rating outlook very negative comments from Fitch yesterday Italy Moody's S&P Fitch Rating Baa2 BBB BBB Outlook Negative Stable Stable Potential rating decision 07 September October August 2018 Requirement for downgrade The rating would be downgraded if policies enacted or anticipated proved insufficient to firmly place the public debt ratio on a sustainable, downward trajectory in the coming years. A failure to articulate and present a credible structural reform agenda which Moody's concludes will enhance economic resiliency by strengthening growth would also put downward pressure on the rating. We could lower our ratings on Italy if its economic growth slumps, bringing its performance once again to well below that of sovereigns at similar levels of development. If its external performance deteriorates, for example due to the current account balance slipping into negative territory, this could also weigh on the ratings. Ratings pressure could also build if budgetary consolidation falters, especially if the new government abandons its sustained fiscal consolidation path or reverses past structural reforms with an adverse impact on the country's economic prospects and its budgetary position. - Political developments negatively affecting economic and fiscal policies and/or outturns; - A rise in gross general government debt/gdp; and - Adverse developments in the banking sector increasing risks to the real economy or public finances. Source. Moody s, Standard & Poor s, Fitch In the table above, we list the requirements for a downgrade. Looking at the comments from Fitch yesterday and the requirements stated above, we believe it is likely the fiscal policy presented by the new coalition government will change the outlook from stable to negative in the short term. Yesterday, Fitch warned about fiscal loosening and potential damage to confidence but also stated that this depends on how the new government implements its programme. Hence, we are still far from a downgrade in the short term and very very far from Italy being downgraded to junk by all four rating agencies, especially as Italy maintained its investment grade rating throughout the entire EU debt crisis, where 10Y Italy was trading above 7%. See the full comment from Fitch here new Italian government policy would increase fiscal risks. 4
5 Italian banks have reduced their exposure to the Italian government bonds The ownership structure of Italian government debt is relatively diversified versus what we see in the peripheral countries, where foreign ownership was well above 50% in some countries before the EU debt crisis in Currently, foreigners own some 33% of the debt, while Italian banks have scaled down their holdings of Italian government debt. The big buyer has been the ECB, which has scaled up given the QE. During the debt crisis in 2011 and 2012, when foreign investors sold BTPS, it was mainly the domestic MFIs (banks, etc.) that scaled up on Italian government bonds. Hence, if there was another round of sell-offs, we believe the domestic banks could be buyers again. Holders of Italian government debt, % of outstanding amount The Italian central bank Italian banks and other financial institutions Life insurance, pension funds etc. Foreign investors Other domestic investor Source. Bank of Italy 5
6 Spillover effects to the other peripheral countries modest pressure on Spain and Portugal but significant pressure on Greece There has been some contagion towards the other peripheral markets but relative to the movement we have seen in the Italian market, it has been rather limited as shown on the chart on the right. Given that this is mainly uncertainty on Italy relative to the rest of EU, the potential spill-over effect should be limited, as the EU and EU commission have previously shown strong commitment to the rest of the EU countries that follow the Maastricht criteria. If the problems in Italy were to escalate, the spread between Italy and the peripheral countries would widen. The country that is currently at most risk is Greece, where the bailout programme ends on 20 August. The pressure on Greek debt has been high and the new 7Y benchmark that launched back in February with a spread of 311bp to Germany lost significantly as hedged funds took more than 30% of the deal and the spread moved above 380bp. Here the spread had moved back to 330bp by the end of April. However, the turmoil in Italy put pressure on Greece and the spread widened to 385bp, before stabilising at 365bp today. bp 10Y Spain versus Germany 10Y Portugal versus Germany 10Y Italy versus Germany Sep-15 Jan-16 May-16 Sep-16 Jan-17 May-17 Sep-17 Jan-18 Source. Danske Bank 6
7 Trade recommendation we are currently long 5Y Italy against 2Y Germany We are currently long 5Y Italy versus 2Y Germany. We took the trade on at 126bp in Government Bonds Weekly A strong conviction trade for Q2: 5Y Italy versus 2Y Germany, 6 April, and it is currently trading at 169bp. We still like the trade and keep it but acknowledge the risk of a further short-term widening, as we do expect to enter the 'vicious' circle. Our base case is that the Italian government will conform with EU rules and the current political uncertainty will settle down. Furthermore, we are very far from a downgrade to junk by all four rating agencies and thus Italian banks can step up their purchase of BTPS and fund these through ECB (although with a haircut). Hence, we expect Italy to tighten again, although the timing is tricky given that the new budget will be scrutinised by the EU commission and the rating agencies. However, Italy is not under an excessive deficit procedure (EDP), so it can be difficult for the EU commission to do much and it has to rely on market pressure to curb an excessive fiscal policy by Italy. The hedge trade is to be long the Bund ASW spread as shown by the widening in recent days. bp The EU curve and credit trade : 5Y Italy versus 2Y Germany, bp Y Italy vs. 2Y Germany 10Y Italy vs. 2Y Germany 0 Jan-16 May-16 Sep-16 Jan-17 May-17 Sep-17 Jan-18 Source. Danske Bank 7
8 Disclosures This research report has been prepared by Danske Bank A/S ( Danske Bank ). The author of this research report is Jens Peter S ørensen, Chief Analyst.. Analyst certification Each research analyst responsible for the content of this research report certifies that the views expressed in the research report accurately reflect the research analyst s personal view about the financial instruments and issuers covered by the research report. Each responsible research analyst further certifies that no part of the compensation of the research analyst was, is or will be, directly or indirectly, related to the specific recommendations expr essed in the research report. Regulation Danske Bank is authorised and subject to regulation by the Danish Financial Supervisory Authority and is subject to the rules and regulation of the relevant regulators in all other jurisdictions where it conducts business. Danske Bank is subject to limited regulation by the Financial Conduct Aut hority and the Prudential Regulation Authority (UK). Details on the extent of the regulation by the Financial Conduct Authority and the Prudential Regulation Authority are available from Danske Bank on request. Danske Bank s research reports are prepared in accordance with the recommendations of the Danish Securities Dealers Associati on. Danske Bank is not registered as a Credit Rating Agency pursuant to the CRA Regulation (Regulation (EC) no. 1060/2009); hence, Danske Bank does not comply with nor seek to comply with the requirements applicable to Credit Rating Agencies. Conflicts of interest Danske Bank has established procedures to prevent conflicts of interest and to ensure the provision of high-quality research based on research objectivity and independence. These procedures are documented in Danske Bank s research policies. Employees within Danske Bank s Research Dep artments have been instructed that any request that might impair the objectivity and independence of research shall be referred to Research Management and the Compliance Department. Danske Bank s Research Departments are organised independently from and do not report to other business areas within Danske Bank. Research analysts are remunerated in part based on the overall profitability of Danske Bank, which includes investment bankin g revenues, but do not receive bonuses or other remuneration linked to specific corporate finance or debt capital transactions. Danske Bank is a market maker and liquidity provider and may hold positions in the financial instruments mentioned in this re search report. Danske Bank, its affiliates and subsidiaries are engaged in commercial banking, securities underwriting, dealing, trading, br okerage, investment management, investment banking, custody and other financial services activities, may be a lender to the companies mentioned in this publication and have whatever rights are available to a creditor under applicable law and the applicable loan and credit agreements. At any time, Danske Bank, its affiliates and sub sidiaries may have credit or other information regarding the companies mentioned in this publication that is not available to or may not be used by the personnel responsibl e for the preparation of this report, which might affect the analysis and opinions expressed in this research report. Financial models and/or methodology used in this research report Calculations and presentations in this research report are based on standard econometric tools and methodology as well as pub licly available statistics for each individual fixed income asset. We base our conclusion on an estimation of the financial risk profile of the financial asset. By combining these risk profile s with market technical and financial assetspecific issues such as rating, supply and demand factors, macro factors, regulation, curve structure, etc., we arrive at an overall view and risk profile for the specific financial asset. We compare the financial asset to those of peers with similar risk profiles and on this background, we estimate whether the specific financial asset is attractively priced in the specific market. We express these views through buy and sell recommendations. These signal our opi nion about the financial asset s performance potential in the coming three to six months. More information about the valuation and/or methodology and the underlying assumptions is accessible via Services/Markets/Research/Pages/researchdisclaimer.aspx. Select Fixed Income Research Methodology. 8
9 Risk warning Major risks connected with recommendations or opinions in this research report, including a sensitivity analysis of relevant assumptions, are stated throughout the text. Completion and first dissemination The completion date and time in this research report mean the date and time when the author hands over the final version of t he research report to Danske Bank s editing function for legal review and editing. The date and time of first dissemination mean the date and estimated time of the first dissemination of this research report. The estimated time may deviate up to 15 minutes from the effective dissemination time due to technical limitations. See the final page of this research report for the date and time of completion and first dissemination. Validity time period This communication as well as the communications in the list referred to below are valid until the earlier of (a) disseminati on of a superseding communication by the author, or (b) significant changes in circumstances following its dissemination, including events relating to the market or the issuer, which can influence the price of the issuer or financial instrument. Investment recommendations disseminated in the preceding 12-month period A list of previous investment recommendations disseminated by the lead analyst(s) of this research report in the preceding 12 -month period can be found at Select Fixed Income Trade Recommendation History Other previous investment recommendations disseminated by Danske Bank are also available in the database. See for further disclosures and information. 9
10 General disclaimer This research report has been prepared by Danske Bank A/S. It is provided for informational purposes only. It does not consti tute or form part of, and shall under no circumstances be considered as, an offer to sell or a solicitation of an offer to purchase or sell any relevant financial ins truments (i.e. financial instruments mentioned herein or other financial instruments of any issuer mentioned herein and/or options, warrants, rights or other interests with respect to any such financial instruments) ( Relevant Financial Instruments ). The research report has been prepared independently and solely on the basis of publicly available information that Danske Ban k considers to be reliable. While reasonable care has been taken to ensure that its contents are not untrue or misleading, no representation is made as to its accuracy or completeness and Danske Bank, its affiliates and subsidiaries accept no liability whatsoever for any direct or consequential loss, including without limita tion any loss of profits, arising from reliance on this research report. The opinions expressed herein are the opinions of the research analysts responsible for the research report and reflect their judgement as of the date hereof. These opinions are subject to change and Danske Bank does not undertake to notify any recipient of this research report of any such change nor of any other changes related to the information provided herein. This research report is not intended for, and may not be redistributed to, retail customers in the United Kingdom or the Unit ed States. This research report is protected by copyright and is intended solely for the designated addressee. It may not be reproduced or distributed, in whole or in part, by any recipient for any purpose without Danske Bank s prior written consent. Disclaimer related to distribution in the United States This research report was created by Danske Bank A/S and is distributed in the United States by Danske Markets Inc., a U.S. re gistered broker-dealer and subsidiary of Danske Bank A/S, pursuant to SEC Rule 15a-6 and related interpretations issued by the U.S. Securities and Exchange Commission. The research report is intended for distribution in the United States solely to U.S. institutional investors as defined in SEC Rule 15a -6. Danske Markets Inc. accepts responsibility for this research report in connection with distribution in the United States solely to U.S. institutional investors. Danske Bank is not subject to U.S. rules with regard to the preparation of research reports and the independence of research analysts. In addition, the research analysts of Danske Bank who have prepared this research report are not registered or qualified as research analysts with the NYSE or F INRA but satisfy the applicable requirements of a non-u.s. jurisdiction. Any U.S. investor recipient of this research report who wishes to purchase or sell any Relevant Financial Instrument may do s o only by contacting Danske Markets Inc. directly and should be aware that investing in non-u.s. financial instruments may entail certain risks. Financial instruments of non-u.s. issuers may not be registered with the U.S. Securities and Exchange Commission and may not be subject to the reporting and auditing standards of the U.S. Securi ties and Exchange Commission. Report completed: 22 May 2018, 15:08 CET Report first disseminated: 22 May 2018, 17:15 CET 10
DKK: foreign investors bought government bonds and treasury bills in August
DKK: foreign investors bought government bonds and treasury bills in August Jens Nærvig Pedersen Analyst Danske Bank Markets jenpe@danskebank.dk +45 45 12 8 61 27 September 213 Important disclosures and
More informationDKK: Foreign ownership share of government bonds at post-crisis high
DKK: Foreign ownership share of government bonds at post-crisis high Jens Nærvig Pedersen Analyst Danske Bank Markets jenpe@danskebank.dk +45 45 12 80 61 28 July2014 Important disclosures and certifications
More informationDKK: Unchanged appetite for Danish bonds among foreign investors in September
DKK: Unchanged appetite for Danish bonds among foreign investors in September Jens Nærvig Pedersen Analyst Danske Bank Markets jenpe@danskebank.dk +45 45 12 8 61 28 October 213 Important disclosures and
More informationEuro Inflation Research #2 ECB s core inflation forecast is too optimistic
Investment Research General Market Conditions 6 March 2015 Euro Inflation Research #2 ECB s core inflation forecast is too optimistic The ECB yesterday published new inflation forecasts, including the
More informationMonitor Euro area credit monitor
Investment Research General Market Conditions 26 November 2014 Monitor Euro area credit monitor Credit growth outlook The latest improvements in euro-area bank lending are expected to continue. The progress
More informationECB Research Draghi reveals favourable TLTRO details
Investment Research General Market Conditions 4 July 2014 ECB Research Draghi reveals favourable TLTRO details The ECB has provided additional details about the targeted LTRO (TLTRO) announced at its meeting
More informationMonitor Euro area deflation
Investment Research General Market Conditions 17 July 2014 Euro area deflation Inflation outlook Euro inflation remained very low at 0.5% in June and is still far below the ECB s target. In response, the
More informationPeriphery research: Greece Signs of improvement compared to the recovery in Latvia
Investment Research General Market Conditions 15 August 2014 Periphery research: Greece Signs of improvement compared to the recovery in Latvia Latvia s economy went into free fall in H2 07 but due to
More informationPeriphery research: Ireland
Investment Research General Market Conditions 12 August 2014 Periphery research: Ireland Virtuous cycles supported by credit rating upgrades The strong Irish growth performance was confirmed in Q1 and
More informationResearch Pent-up demand in investments could boost euro area growth
Investment General Market Conditions 3 September 2013 Pent-up demand in investments could boost euro area growth The euro area has finally moved out of recession and at this stage pent-up demand could
More informationResearch US Further downgrade of US debt likely in 2012
Investment Research General Market Conditions 1 August 11 Research US Further downgrade of US debt likely in 1 The recent years fast rise in US gross debt combined with a deterioration of economic outlook
More informationNorges Bank Review 24 September 2015
Norges Bank Review 24 September 2015 A 25bp rate cut and an easing bias Frank Jullum Chief Analyst fju@danskebank.dk www.danskebank.com/research Arne Lohmann Rasmussen Chief Analyst klom@danskebank.dk
More informationFX Edge Rules or discretion? A look at past rate hikes in Denmark
Investment Research General Market Conditions 8 January 2019 FX Edge Rules or discretion? A look at past rate hikes in Denmark We look at 14 unilateral rate hikes in Denmark since 1999 to draw a picture
More informationStrategy The big EUR curve flattening has started
Investment Research General Market Conditions 18 January 2018 Strategy The big EUR curve flattening has started It has been a rocky past month for both the US and the European fixed income market, as 10Y
More informationEuro inflation research #3 Time to position for higher inflation
Investment Research General Market Conditions 11 March 2015 Euro inflation research #3 Time to position for higher inflation We see value in positioning for higher inflation especially after the oil price
More informationCommodities Research What if Iran s oil returns to the market?
Investment Research General Market Conditions 2 November 213 Commodities Research What if Iran s oil returns to the market? Momentum seems to be growing in talks over Iran s nuclear programme as negotiations
More informationStrategy Bond yield conundrum vol. 2
Investment Research General Market Conditions 30 November 2017 Strategy Bond yield conundrum vol. 2 The big US curve flattening The big theme in the US fixed income market is the flattening of the yield
More informationBoJ Preview BoJ set to meet high expectations
Investment Research General Market Conditions 27 July 2016 BoJ set to meet high expectations We expect the Bank of Japan (BoJ) to cut its policy rate by 20bp to -0.3% and expect additional qualitative
More informationFlash Comment Is renewed surge in credit forcing PBoC to tighten further?
Investment Research General Market Conditions 18 February 2014 Flash Comment Is renewed surge in credit forcing PBoC to tighten further? Today, for the first time since June 2013, the Peoples Bank of China
More informationTrade Recommendation EUR rates: Pay 15Y15Y, Receive 2Y2Y EUR
Investment Research 9 July 2013 Trade Recommendation EUR rates: Pay 15Y15Y, Receive 2Y2Y EUR Pay 15Y15Y, Receive 2Y2Y EUR spread (vs 6M Euribor) Open ½ position @ 152bp with an option to open next ½ position
More informationECB research #1 ECB s growth projection, economic slack and credit supply
Investment Research General Market Conditions 22 May 2014 ECB research #1 ECB s growth projection, economic slack and credit supply We expect the ECB to lower its GDP growth projection for 2014 as growth
More informationEuro inflation research #1 Inflation to increase sharply this year
Investment Research General Market Conditions 05 March 2015 Euro inflation research #1 Inflation to increase sharply this year Euro inflation surprised on the upside in February and consequently we revise
More informationMonitor Chinese credit crunch
Investment Research General Market Conditions 28 January 2014 Monitor Chinese credit crunch Most of our indicators for credit risk including the swap-government bond spread, the spread between onshore
More informationEuro area fundamentals #1 Potential growth important for bond yields
Investment Research General Market Conditions 1 June 2015 Potential growth important for bond yields Bond yields have been driven by ECB flows in 2015 and it seems evident that fundamentals have had a
More informationSwedavia AB. Marketweight CREDIT & CORP BONDS RESEARCH. Q2 17: Good growth with high investments. Good growth with high investments
CREDIT & CORP BONDS RESEARCH Investment Research 17 August 2017 Swedavia AB Post-results Q2 17: Good growth with high investments Swedavia s revenues and earnings showed good growth in Q2, supported by
More informationResearch: Denmark Danish independent rate hike has moved closer
Investment Research 17 December 215 Research: Denmark Danish independent rate hike has moved closer After the December ECB meeting we have seen a new currency outflow from Denmark, and we now forecast
More informationECB preview Dovish and slightly worried
Investment Research General Market Conditions 27 August 2015 ECB preview Dovish and slightly worried Main focus on the drop in 5Y5Y inflation expectations that are again far below the ECB s 2%-target The
More informationCovered Bonds Update LCR-induced rally has run its course
Investment Research 14 October 2014 Covered Bonds Update LCR-induced rally has run its course Last Friday, the European Commission (EC) published details on the treatment of covered bonds in the upcoming
More informationDONG Energy Hybrid exchange offer at significant discount
Investment Research General Market Conditions 10 June 2013 DONG Energy Hybrid exchange offer at significant discount Today DONG Energy announced that it has abandoned its plans to change the prospectus
More informationEuro area outlook for 2015
Investment Research General Market Conditions 14 January 2015 Euro area outlook for 2015 Deflation but the good kind The euro area slipped into deflation in December 2014 and we expect the inflation rate
More informationRoom for tighter asset swap spreads as issuance picks up
Room for tighter asset swap spreads as issuance picks up Senior Analyst Senior Analyst Peter Possing Andersen Lars Tranberg Rasmussen +45 4513 719 + 45 4512 8534 pa@danskebank.dk laras@danskebank.dk Trade
More informationFX Strategy USD/JPY is back in business - we target 114
Investment Research 11 September 2014 FX Strategy USD/JPY is back in business - we target 114 USD/JPY has recently broken the early 2014 high of 105.50 and is now back to 2008 levels. The upside break
More informationFed s quantitative tightening details
Fed s quantitative tightening details Impact on the balance sheet and reinvestments Mathias Røn Mogensen Analyst, Fixed Income Research +45 45 13 71 79 mmog@danskebank.dk 19 June 2017 Investment Research
More informationECB QE: Buxl/Bund tapering and step up in Ita/Fra/Spa
ECB QE: Buxl/Bund tapering and step up in Ita/Fra/Spa Pernille Bomholdt Henneberg Anders Møller Lumholtz Senior Analyst, Euro Area Macro Research Chief Analyst, Fixed Income Research +45 45 13 20 21/+44
More informationGlobal Inflation. Set to surprise on the upside lifting long-dated inflation pricing. 27 October /
Global Inflation Set to surprise on the upside lifting long-dated inflation pricing Pernille Bomholdt Henneberg Mikael Olai Milhøj Senior Analyst, Euro area macro research Senior Analyst, US and UK macro
More informationInvestment Research General Market Conditions 3 December Dec HICP (flash est. 0.1%) LTRO1 matures
Investment Research General Market Conditions 3 December 214 ECB preview ECB s timeline is tricky isn t it? The ECB has eased twice in 214, but liquidity conditions in the Euro system will still be balancing
More informationFlash Comment China drafts plan for Tobin tax on FX transactions implications and recommendations
Investment Research General Market Conditions 16 March 2016 Flash Comment China drafts plan for Tobin tax on FX transactions implications and recommendations What s the plan? According to sources close
More informationEuro Inflation Research #1 How the ECB makes its inflation projections
Investment Research General Market Conditions 24 February 2014 Euro Inflation Research #1 How the ECB makes its inflation projections Mario Draghi has hinted that the new 2016 forecasts due to be published
More informationNorges Bank Review. Unchanged but September cut still in store. 23 June Follow us on
Norges Bank Review Unchanged but September cut still in store Frank Jullum Chief Economist +47 85 40 65 40 fju@danskebank.dk Kristoffer Kjær Lomholt Analyst +45 45 12 85 29 klom@danskebank.dk 23 June 2016
More informationFixed Income Market Watch
Investment Research 07 January 2013 Fixed Income Market Watch Sweden The Riksbank and Money Market Forecast repo rates given Riba pricing, Riksbank and Danske Bank Markets Repo Diff. Danske Bank Eff. Date
More informationFixed Income Market Watch
Investment Research 9 April 2013 Fixed Income Market Watch Sweden Riksbank and Money Market Forecast repo rates given Riba pricing and Danske Bank Markets Repo Eff. Date Riba Diff. (bp) Danske Markets
More informationResearch France begins to look like a peripheral country
Investment General Market Conditions 22 March 2013 France begins to look like a peripheral country The short-term outlook for France looks more like that of a peripheral country than the strong German
More informationECB s easing package and markets zig-zag
ECB s easing package and markets zig-zag Pernille Bomholdt Henneberg Jens Peter Sørensen Christin Tuxen Senior Analyst, Euro Macro Research Chief Analyst, Fixed Income Research Senior Analyst, FX Research
More informationFixed Income Market Watch Sweden
Investment Research 4 March 2013 Fixed Income Market Watch Sweden Riksbank and Money Market Forecast repo rates given Riba pricing, Riksbank and Danske Bank Markets Repo Eff. Date Riba Diff. (bp) Riksbank
More informationResearch US The subtle push for price level targeting continues
Investment Research General Market Conditions 03 January 2018 The subtle push for price level targeting continues DANSKE BANK NEW RESEARCH WEBSITE: We have launched our new research website with all our
More informationVolatility in the money market is not unusual in June and December window dressing an important explanation
Investment Research General Market Conditions 2 July 213 Monitor Chinese credit crunch The surge in money market rates in June has created fears that China could be facing a severe credit crunch with substantial
More informationEuro area housing markets
Investment Research General Market Conditions 22 October 212 Euro area housing markets A temperature gauge The euro area housing market spans large differences, as shown in Danske Bank s Euro Area Housing
More informationFX Strategy Prepare for removal of the EUR/CZK floor
Investment Research General Market Conditions 24 October 2016 FX Strategy Prepare for removal of the EUR/CZK floor The Czech National Bank (CNB) plans to exit its exchange rate floor to the euro in the
More informationMonitor Chinese credit crunch
Investment Research General Market Conditions 15 September 2014 Monitor Chinese credit crunch Credit growth continued to slow in August. The broad credit measure total social finance (TSF) slowed to 15.3%
More informationMonitor Chinese credit crunch
Investment Research General Market Conditions 26 August 213 Monitor Chinese credit crunch Credit expansion stabilised in July with seasonally adjusted new credit expanding CNY1.trn after increasing CNY.8trn
More informationFlash Comment China takes more steps to fight financial risks
Investment Research General Market Conditions 20 November 2017 Flash Comment China takes more steps to fight financial risks China stepped up the fight against the risks of shadow banking on Friday, announcing
More informationStrategy Slowing EM outflows to support euro, Scandi markets
Jan-5 Jun-5 Nov-5 Apr-6 Sep-6 Feb-7 Jul-7 Dec-7 May-8 Oct-8 Mar-9 Aug-9 Jan-1 Jun-1 Nov-1 Apr-11 Sep-11 Feb-12 Jul-12 Dec-12 May-13 Oct-13 Mar-14 Aug-14 Jan-15 Jun-15 Investment Research General Market
More informationECB preview: another minor hawkish twist
Investment Research General Market Conditions ECB preview: another minor hawkish twist Pernille Bomholdt Henneberg Jens Peter Sørensen Christin Tuxen Chief Analyst Chief Analyst Chief Analyst +45 45 13
More informationNorges Bank Review Unchanged rates and neutral bias maintained
Investment Research General Market Conditions 16 March 2017 Norges Bank Review Unchanged rates and neutral bias maintained As expected, Norges Bank (NB) this morning left the sight deposit rate unchanged
More informationNegative deposit rates The Danish experience
Negative deposit rates The Danish experience Chief analyst Arne Lohmann Rasmussen +45 45 12 85 32 FX, Rates and Commodities Research November 2013 Investment Research Agenda the Danish experience Danish
More informationFlash Comment ECB preview: Still pressure from low inflation
Investment Research General Market Conditions 8 January 2014 Flash Comment ECB preview: Still pressure from low inflation Euro inflation has declined again and core inflation is at an all-time low. This
More informationVasakronan AB. Marketweight CREDIT & CORP BONDS RESEARCH. Healthy organic growth. Further decline in leverage. Profitability.
CREDIT & CORP BONDS RESEARCH Investment Research 5 May 2017 Post-results Vasakronan AB Q1 17: Healthy organic growth Vasakronan showed a good performance in Q1. Due to the current strong Swedish property
More informationGrexit what if? Don t expect any solution before the summer crunch time
Investment Research General Market Conditions 22 April 2015 Grexit what if? Don t expect any solution before the summer crunch time Main scenario: Greece remains in the euro We still expect Greece will
More informationResearch Global Oil price to bottom when non-opec output rise halts déjà vu #2
Investment Research General Market Conditions 18 December 2014 Oil price to bottom when non-opec output rise halts déjà vu #2 We expect the current slide in oil prices to continue until we see producers
More informationECB Research ECB cutting through the lower bound Danish experiences
Investment Research General Market Conditions 03 November 2015 ECB Research ECB cutting through the lower bound Danish experiences Given the turnaround in the ECB s view on deposit rate cuts, we expect
More informationResearch Iceland: Recovery in uncertain times
Investment Research General Market Conditions 12 April 2011 Research Iceland: Recovery in uncertain times The Icelandic economy is now recovering after the collapse of the Icelandic banking sector in October
More informationStatoil Q1 14: helped by weaker local currency
Investment Research 29 April 214 Statoil Q1 14: helped by weaker local currency Statoil delivered a good Q1 14 result from a credit perspective. Group entitlement production was unchanged y/y. Coupled
More informationECB easing will it work? #2
Investment Research General Market Conditions 26 August 214 ECB easing will it work? #2 Liquidity and money market rates We expect the TLTROs will boost liquidity. However, the amount of borrowing limits
More informationGrowth might show positive surprise
Baltic Outlook Growth might show positive surprise Violeta Klyvienė Senior Baltic Analyst +370 5 2156992, +370 611 24354 April 2011 vkly@danskebank.dk Important disclosures and certifications are contained
More informationReading the Markets Sweden
Investment Research - General Market Conditions 13 December 2012 Reading the Markets Sweden How weak is the Swedish economy really? Possible consequences for the curve Danske Banks market view in a nutshell
More informationVasakronan AB. Marketweight CREDIT & CORP BONDS RESEARCH. Q3 17: Growing project development portfolio
CREDIT & CORP BONDS RESEARCH Investment Research 21 November 2017 Vasakronan AB Post-results Q3 17: Growing project development portfolio Vasakronan showed a steady operating performance in Q3, with moderate
More informationFlash Comment China holiday wrap-up: sentiment improving
Investment Research General Market Conditions 9 August 2016 Flash Comment China holiday wrap-up: sentiment improving Below is a brief summary of developments in China over the summer Chinese offshore stocks
More informationGovernment Bonds Weekly, 26 January 2 February 2018 Still more value in Spain - buy new 10Y bond
Investment Research Government Bonds Weekly, 26 January 2 February 2018 Still more value in Spain - buy new 10Y bond Arne Lohmann Rasmussen Jens Peter Sørensen Mathias Røn Mogensen Chief Analyst, Head
More informationResearch US The outlook for US government debt
Investment Research General Market Conditions 3 September Research US The outlook for US government debt US net debt has risen fast during the recent recession, to more than from 36% in 7. Compared with
More informationStrategy Fed heading for the exit door
1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 Investment Research General Market Conditions 16 June 2017 Strategy Fed heading for the exit door The most anticipated event this week was clearly
More informationFlash Comment ECB preview: Another refi rate cut
Investment Research General Market Conditions 4 February 2014 Flash Comment ECB preview: Another refi rate cut At the ECB meeting last month, Mario Draghi described two scenarios that would lead to action.
More informationBrexit Monitor May is losing control over the Brexit process but no credible alternative has emerged yet
Investment Research General Market Conditions 11 January 2019 May is losing control over the Brexit process but no credible alternative has emerged yet The House of Commons went back to business this week
More informationNorges Bank preview A 25bp rate cut and easing bias
Investment Research 17 March 2015 Norges Bank preview A 25bp rate cut and easing bias We expect Norges Bank (NB) to deliver a 25bp rate cut on Thursday. NB is set to keep the easing bias by presenting
More informationInvestment Research General Market Conditions 24 February 2014
Investment Research General Market Conditions 24 February 2014 Finnair FY 2013 Finnair s fullyear 2013 result was burdened by a weak Q4 13 impacted by oneoff costs. Due to the divestment of assets reported
More informationECB Preview. Ready to scale back QE. 18 October 2017
Investment Research General Market Conditions ECB Preview Ready to scale back QE Aila Mihr Jens Peter Sørensen Morten Helt Analyst Chief Analyst Senior Analyst +45 45 12 85 35 +45 45 12 85 17 +45 45 12
More informationVasakronan AB. Marketweight CREDIT & CORP BONDS RESEARCH. Q2 18: Keen on green. Strong market fundamentals. Corporate ticker: FASTIG
CREDIT & CORP BONDS RESEARCH Investment Research 2 August 2018 Vasakronan AB Post-results Q2 18: Keen on green Strong market fundamentals in the commercial property space continued to be the main theme
More informationStrategy With fading EU political risks, global business cycle back in focus
Investment Research General Market Conditions 5 May 2017 Strategy With fading EU political risks, global business cycle back in focus Political risks in Europe fading for now Political risks in Europe
More informationECB research Implications of the ECB easing measures
Investment Research General Market Conditions 5 June ECB research Implications of the ECB easing measures The ECB surprised the markets by boosting liquidity through a new 4Y targeted LTRO (TLTRO) while
More informationResearch Euro area: debt crisis set to continue for years
Investment Research General Market Conditions 13 September 20 Research Euro area: debt crisis set to continue for years At the beginning of the year, we presented three debt crisis scenarios. In this document
More informationWill the ECB be forced to re-enter the currency war?
Will the ECB be forced to re-enter the currency war? Pernille Bomholdt Henneberg Jens Peter Sørensen Christin Tuxen Senior Analyst, Euro Macro Research Chief Analyst, Fixed Income Research Senior Analyst,
More informationSwedavia AB. Marketweight CREDIT & CORP BONDS RESEARCH. Stable credit metrics. Corporate ticker: Equity ticker:
CREDIT & CORP BONDS RESEARCH Investment Research 31 October 216 Swedavia AB Post-results Q3 16: Stable metrics as passenger traffic increased Swedavia reported stable earnings and credit metrics for Q3.
More informationIn the euro area the trade balance for June will give insight into whether the end of the recession was driven by growth abroad.
Investment Research General Market Conditions 16 August 2013 Danske Daily Market movers today In the euro area the trade balance for June will give insight into whether the end of the recession was driven
More informationResearch China A turn in construction to be a game changer
Investment Research General Market Conditions 31 March 2016 Research China A turn in construction to be a game changer The hard landing in Chinese construction looks set to be ending. We look for a gradual
More informationReading the Markets Norway International political risk, in a slow domestic summer market, puts downward pressure on rates
Investment Research 16 July 2018 Reading the Markets Norway International political risk, in a slow domestic summer market, puts downward pressure on rates Macro: the domestic economy is still strong in
More informationNew yield forecast ECBs soft tone postpones expected tightening to 2011
Investeringsanalyse Marts New yield forecast ECBs soft tone postpones expected tightening to Latest market developments Generally speaking the economic data continue to point to a sustainable economic
More informationDemand for sovereign bonds: The importance of diversity
Demand for sovereign bonds: The importance of diversity ECB Bond Market Contact Group 1 July 2014 Christoph Rieger, Head of Interest Rate and Credit Research, +49 69 136 87664 Key themes (1) Core: Investor
More informationScandinavia - Land of the true AAA s. Anders Møller Lumholtz Senior Analyst August 2013
Scandinavia - Land of the true AAA s Anders Møller Lumholtz Senior Analyst andjrg@danskebank.dk August 2013 Strong balances: Fiscal and external balances are very solid Budget bal, % of GDP CA bal. (%
More informationStrategy US stalls while China and Europe strengthen
Investment Research General Market Conditions 18 October 2013 Strategy US stalls while China and Europe strengthen Once again US politicians struck a last-minute deal and once again fears were running
More informationSovereign Rating Calendar 2019
Creditreform Rating AG Sovereign Rating Calendar 2019 Neuss, December 2018 Creditreform Rating AG Hellersbergstrasse 11 D 41460 Neuss www.creditreform-rating.de Table of contents INTRODUCTION... 2 RATING
More informationResearch Global inflation scare: Overview
Investment Research February Research Global inflation scare: Overview With the global recovery strengthening and commodity prices rising sharply, inflation has returned as a market theme. In a series
More informationWhy should we be worried about Italian budget plans? CHART 1: ITALIAN GENERAL GOVERNMENT DEBT (WITH PROJECTIONS UNTIL 2021)
Authors NADIA GHARBI, CFA ngharbi@pictet.com LAURÉLINE CHATELAIN lchatelain@pictet.com SUMMARY The Italian government has submitted its 2019 draft budget plan (DBP) to the European Commission. The proposed
More informationDefault Risk Jumps Sharply for Troubled Bank. Figure 1: Bankia SA s One-Year EDF Measure
25 MAY 2012 CAPITAL MARKETS RESEARCH EDF TM CASE STUDY Bankia S.A. Default Risk Jumps Sharply for Troubled Bank Moody s Capital Markets Research, Inc. Authors David T. Hamilton, PhD +1 (212) 553-1695 david.hamilton@moodys.com
More informationPakistan Pkit Economy
Pakistan Equity Economy Update Jun 21, 2018 REP 057 Pakistan Pkit Economy Credit Rating Agencies turning Negative Saad Hashemy saad@topline.com.pk Tel: +9221 35303330 Topline Securities, Pakistan www.jamapunji.pk
More informationModelling the sovereign debt crisis in Europe
Modelling the sovereign debt crisis in Europe National Institute Global Econometric Model Dawn Holland October 211 Project LINK Meeting on the World Economy National Institute of Economic and Social Research
More informationDanske Daily. Market Movers. Selected Market News
Investment Research General Market Conditions 13 August 2015 Market Movers Focus will continue to be on Chinese exchange rate policy and not least to what degree the People s Bank of China (PBoC) attempts
More informationYield Outlook 10Y Bund yields set to remain close to zero through 2019
Investment Research General Market Conditions 11 April 2019 10Y Bund yields set to remain close to zero through 2019 In the previous issue of, 13 March, we argued that the ECB would help keep short and
More informationThemes in bond investing June 2009
For professional investors only Not for public distribution January 2011 Themes in bond investing June 2009 Introduction Eurozone sovereign risk concerns are back in the spotlight following the Irish bailout.
More informationPart 2: Eurozone Inflation Upside risks from oil prices and rising wage pressures
Investment Research General Market Conditions 27 February 2018 Part 2: Eurozone Inflation Upside risks from oil prices and rising wage pressures In this second document in our series, we focus on eurozone
More informationReading the Markets Norway On track for a March hike
Investment Research 18 February 2019 On track for a March hike Macro: Norges Bank appears determined to hike in March. Fixed income: expensive mid-segment s in ASW terms. NOK FX: utilise NOK setback to
More informationPortuguese Banking System: latest developments. 2 nd quarter 2017
Portuguese Banking System: latest developments nd quarter 17 Lisbon, 17 www.bportugal.pt Prepared with data available up to th September of 17. Portuguese Banking System: latest developments Banco de Portugal
More information