recovery

World economy 3rd September 2020

Recovery: Slow, But Not So Steady

Johannes Müller Head of Macro Research DWS | Until the Covid-19 virus is finally defeated, the recovery looks set to continue at an uneven pace. In our view, pandemic containment will remain an economic drag for the foreseeable future. Over the course of the summer, we have already seen signs of the initial, V-shaped recovery giving way to a much flatter curve of improving global economic activity. The good news is that most developed countries appear better prepared for potential renewed virus surges in the fall than they were in spring.

European economy 15th July 2020

Europe Is Gaining Ground: Eurozone’s Activity Reaches 92% Of Pre-Crisis Level; The US Stagnates At 67%

David Kohl (Chief Economist Germany, Julius Baer) | Lower new infection rates in Europe and a swifter recovery of activity are valid reasons to scale back some pessimism regarding the eurozone growth outlook. The eurozone has ramped up its fiscal response to the corona pandemic. We feel comfortable in expecting for the region a more moderate contraction of -7.2% in 2020.

World economy 9th July 2020

Can International Tourism Ever Recover?

James Reilly (Schroeders)| The current coronavirus crisis appears to be a rather potent cocktail of all three of these events: a viral epidemic more widespread than SARS, an economic downturn sharper than the GFC, and a fear of flying comparable to the aftermath of 9/11. This points to a trough far greater than the 45% downturn in international travel seen nine months into the GFC.

World economy 7th July 2020

The Other Looming V-Shaped Recovery

DWS | There are a few reasons to think that unlike the economy, inflation could see a V-shaped recovery. Recently published inflation data seem to confirm this theoretical view. Without taking into account the energy component, which, thanks to the oil price, fluctuated wildly in 2020, the inflation rate in the Eurozone was 1.3% in June. That is exactly the same level as at the beginning of the year.

World economy 29th June 2020

A V-Shaped Bounce In Q3 GDP Is Possible

Chris Iggo (AXA Investment Managers) | The second quarter was disastrous for society and the global economy. The danger on both fronts is passing only slowly. Yet the quarter was great for markets. Barely any asset class delivered a negative return. Trillions of dollars of money was created and central bank balance sheets boomed. It has been a lesson in not underestimating the power of policy. Cheap valuations and rocket-fuel policy drove risk assets. The starting point for Q3 is not quite the same. Where fundamentals go is much more important now.

World economy 29th June 2020

Consumption: Support Point For Recovery

José Ramón Díez Guijarro (Bankia Estudios ) | The first weeks of the opening of the economies are serving to gauge the response of consumption, a key variable in determining the profile and intensity of the recovery. In the US, the fiscal programmes for aid to families injected more than 300 billion dollars into disposable income in the second quarter. In Europe, instead of using direct aid as in the US, they have preferred to activate temporary employment suspension programmes (ERTE in Spain, kurzabeit in Germany, etc).

Spanish economy 25th June 2020

Spain: The Dismal Inputs From The Reconstruction Committee

Juan Pedro Marín Arrese | Spain faces dire prospects according to most estimates, as its crucial tourist sector is taking a heavy toll. Up to now,the Government has struggled to mitigate the ensuing onslaught on employment by financing temporary layoffs and supporting low-income households. Yet, GDP will plunge in 2020 and will probably display a sluggish rcovery in the following couple of years. Lower income levels and a substantial surge in unemployment will sharply cut down demand and output.

In Europe 28th May 2020

Italy And Spain, The Countries To Benefit Most From The Recovery Fund: €172.8 Bn And €140 Bn, Respectively, Between Transfers And Loans

The Recovery Fund exceeds the Merkel/Macron proposals with an amount of €750 billion euros (equivalent to 5.4% of the EU27’s annual GDP). Italy and Spain would be the countries to most benefit. This was something that was quickly reflected in the performance of peripheral credit on Wednesday, especially in the financial sector, with improvements on average of about 10bp in the CDS of banks in both countries. For its part, France and Germany will receive transfers of 39 Bn and 29 Bn, respectively.

World economy 10th May 2020

US Stocks To Be Relative Winners In A Post-Covid-19 World

Patrik Lang, Head Equities (Julius Baer) | We have downgraded eurozone equities to Underweight given slower earnings recovery expectations, increasing political risk and unfavourable sector exposure. In our view, relative valuations do not fully reflect these negatives. On the other hand, we have upgraded US equities, which should benefit from a relatively fast post-Covid-19 recovery.

Spanish economy 28th April 2020

What If There Is A V-Shaped Recovery?

A glimmer of hope in the macro scenario managed by Banco Santander’s Research team. Compared to more somber estimates such as those from the Bank of Spain or BBVA Research, the experts at Santander Corporate & Investment do believe in a V-shaped recovery.Banco Santander’s base scenario envisages a 5.2% fall in Spanish GDP this year compared with 8.3% growth in 2021.

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