CoreMacro

Special Report

Greece has staged a surprising economic recovery in recent years. Greek risk assets are the best performers in Europe. Can it last?

Investors hope that the ECB rate cuts priced into the curve will be sufficient to achieve a soft landing in Europe. History argues against this view, but will this time be different?

As Trump’s victory odds rise, the underperformance of European equities deepens. How negative would a global trade war be for European assets?

The real threat to European equities is growth, not political risk. How low will Eurozone earnings fall during the coming recession and how much will equities decline in response?

At first glance, France has moved to the far left. However, this coalition is fragile, and Macron’s allies still hold the balance of power. What are the assets that will benefit from this new political setup, and those that will not?

The new Labour government will have flexibility to respond to macro shocks, which is positive for the UK in general, namely GBP-EUR, and also gilts in absolute terms. But over the long run, tax hikes will likely surprise to the upside, which poses a risk to corporate earnings.

Does the incipient slowdown in European data herald a soft landing and a goldilocks period for equities? We have our doubts.

Special Report

The Labour Party’s comeback in the UK is widely expected and will lead to fiscal stimulus consisting of increased public spending with minimal tax hikes. But a sweeping single-party majority will reduce social unrest only at the cost of higher taxes over the medium term. The paradigm has shifted away from the Thatcherite low-tax regime of the now-discredited Tories. v

Is the BoE making a mistake moving toward rate cuts before the end of the summer? What would such a move mean for UK asset prices?

European assets are selling off as investors panic about the upcoming French election. Is this panic justified, and if so, for how long?