Europe
European natural gas prices have surged above recent highs, but the absence of a corresponding rise in longer-term inflation expectations argues against the ECB hiking deeply into restrictive territory. ICE Dutch TTF prices, the European benchmark, have moved…
China’s rise up the industrial value chain is creating a structural challenge for Europe. Our Chart Of The Week comes from Jeremie Peloso, Chief European Strategist. China shock 1.0 largely benefited Europe. China supplied cheap labor and low value added…
China shock 2.0 threatens Europe’s industrial core, but it is also forcing a long-overdue response. China stands to lose more than the EU from the coming confrontation. Beijing cannot afford to alienate Europe while its domestic demand remains weak. Europe, meanwhile, can turn protectionism into a stronger fiscal multiplier and an industrial revival.
Sweden's economy is sending an ominous signal. GDP contracted 0.8% m/m, dragging the three-month moving average to zero, with industrial output as the primary drag. As our European and FICC teams have noted, the Swedish industrial cycle has been slowing down.…
The September ZEW survey sent mixed signals, reinforcing our view that European growth momentum is unlikely to accelerate materially and supporting an overweight on Bunds. Euro area expectations fell to 25.8 from 31.4. In Germany, expectations missed…
Europe’s AI buildout is creating a new source of structural power demand. Our Chart Of The Week comes from our analyst Eugenia Pan, and shows why this trend is favoring utilities with reliable low-carbon power. Finland offers an early example. While its…
Our GeoMacro strategists think the AfD’s historic victory in Saxony-Anhalt is being overinterpreted, with national leadership still far away. The party fell short of a majority and will face constraints even at the state level. While the AfD has national…
Alternative for Germany’s election win in the state of Saxony-Anhalt is overrated.
Our European investment strategists see Poland's near-term growth story as still compelling, with accelerating EU investment supporting equity outperformance. Real GDP has more than doubled since accession in 2004, helped by export integration, EU funding,…
After Hormuz, Germany faces another shipping chokepoint, at home this time. Water level at the Rhine's river’s most critical chokepoint, Kaub, has fallen to just 11cm, the lowest reading since the 1970s. Forecasters warn it could take weeks of sustained rain…