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STUDIES | MACRO

Mortgage Loans

Deutsche Bank Research

HOME BUYERS ARE FINANCING EVEN MORE LONG-TERM

Mortgage loans in Germany have risen to EUR 1,240 bn in recent years (+29% since 2011) thanks to the strong economy and falling interest rates. To account for increased risks for the banks, supervisory authorities decided at the end of May to activate the countercyclical capital buffer for the first time. E.g., almost half of all new loans now have a rate fixation period of more than 10 years. Banks’ business with private households got off to a strong start in 2019. Net lending in the first quarter amounted to EUR 8.8 bn and deposits increased by EUR 21.8 bn, both record figures for the beginning of the year. Both mortgages and consumer loans grew strongly. >more


Oil Outlook to 2050

Barclays

OIL IN 3D: THE DEMAND OUTLOOK TO 2050

The United Nations’ Intergovernmental Panel on Climate Change (IPCC) recently warned that a 2015 pledge by governments to restrict global warming to 2 degrees Celsius above pre-industrial levels will not be enough. It recommended that average temperature rises be capped at 1.5 degrees to avoid irreversible environmental damage. To achieve the global emissions pledge by 2050 and limit temperature rises to agreed targets, oil demand may need to fall 30%. Our Research team investigated whether the globe’s estimated oil needs for the next few decades could be compatible with such a drop. >more


German Economy 2019

Ernst & Young

STANDORT DEUTSCHLAND 2019: NEUER SCHWUNG?

Despite the imminent Brexit, foreign companies continue to focus on the UK as a location: With a total of 1,054 investment projects by foreign companies, the UK once again took first place in the European comparison of locations in 2018; compared with the previous year, however, the number of investments fell by 13 percent. Germany as an investment location also recorded a decline of 13 percent: after 1,124 projects in the previous year, only 973 investment projects were counted in Germany in 2018 - the first decline since the survey began in 2005. In the European investment ranking, Germany fell from second to third place behind France, which recorded an increase in investments of 1 percent to 1,027. >more


Foreign Direct Investment 2019

A.T. Kearney

THE 2019 FOREIGN DIRECT INVESTMENT CONFIDENCE INDEX

Paradoxes permeate the results of the 2019 Foreign Direct Investment (FDI) Confidence Index, the latest edition of the annual executive survey that ranks the countries likely to attract the most investment in the next three years. Developed markets dominate the 2019 rankings, even as investors worry about rising political and economic risks within these markets. In frontier and emerging markets, average scores increased, yet not enough for more than a few to rank in the top 25. Cities play an increasingly important role in FDI decisions even in an era of rising nationalist sentiments. And despite investors consistently telling us in recent years that they plan to increase their levels of FDI, recorded levels of FDI fell once again in 2018. >more


Global Macro Trends 2019

KKR

GLOBAL MACRO TRENDS: THE UNCOMFORTABLE TRUTH

As the intensifying yearn for yield by investors increasingly bumps up against “the uncomfortable truth” of declining interest rates amidst soaring fiscal deficits and bulging debt loads, KKR’s Global Macro, Balance Sheet, and Risk Analytics team has analyzed what yield-oriented investors, especially those with large swaths of exposure to Fixed Income and Real Assets, can do to outperform without taking on undue risks in this environment. Our suggestion is to own more cash flowing assets linked to nominal GDP, build more flexibility across mandates, and shorten duration where appropriate. Importantly, despite our view that inflation will remain low in the medium-term, we respect that the ‘Authorities’ are trying shrink existing debt loads by holding nominal interest rates below nominal GDP. As such, we believe strongly that an overweight to modestly leveraged Infrastructure and certain Real Estate investments with yield is prudent to add some ballast to one’s portfolio. >more


China and the Global Economy

UBS

TAKING THE LEAD: HOW CHINA IS DRIVING THE GLOBAL ECONOMY AND CREATING OPPORTUNITIES

In a year when the US economy accelerated, it is worth bearing in mind that it is still China that drove the world economy, delivering an estimated 25%+ of total global growth during 2018. That is a reality that we'll have to get used to, with a range of estimates forecasting that China will eventually overtake the US as the largest and most influential economy in the world within the next ten years. But as we move into 2019, near-term challenges, like trade tensions, debt and the sustainability of reforms, dominate the outlook. We don't underestimate the importance or scale of these challenges, but we feel that – properly managed – China still has undoubted potential to grow sustainably over the longer term. >more


BIS March 2019

Bank for International Settlements

BIS QUARTERLY REVIEW: MARCH 2019

The period under review started just the way the last one ended. In the second half of December, the risk-off phase persisted. Led by the US markets, stock prices worldwide continued to decline, volatility to rise, credit spreads to widen, sovereign bond yields to soften, term premia to fall and market-implied inflation expectations to dip. Volumes in the leveraged loan market and issuance of high-yield bonds slowed to a trickle; and withdrawals from mutual funds added to the surge in corporate spreads. >more


Brexit and German Economy

Deloitte

BREXIT BRIEFING

In the current issue of "Brexit and the German Economy: Risks, Expectations and Strategies of Companies", we analyse the perspective of German companies on the consequences of Brexit and the Brexit process in cooperation with the Federation of German Industries (BDI). The focus here is on companies' assessments of the Brexit negotiations, the consequences, risks and opportunities of the Brexit for Germany as a business location and for the companies themselves, as well as the political consequences. >more


Global Risks 2019

World Economic Forum

THE GLOBAL RISKS REPORT 2019

The report presents the results of our latest Global Risks Perception Survey, in which nearly 1,000 decision-makers from the public sector, private sector, academia and civil society assess the risks facing the world. Nine out of 10 respondents expect worsening economic and political confrontations between major powers this year. Over a ten-year horizon, extreme weather and climate-change policy failures are seen as the gravest threats. >more