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Global Capital

Ernst & Young

GLOBAL CAPITAL CONFIDENCE BAROMETER

The global economy is softening and desynchronizing, but according to the EY Global Capital Confidence Barometer, respondents still expect growth. Global economic activity has slowed in some of the major economies in 2019. But most major economies are still growing. >more


Global Competitiveness 2019

World Economic Forum

GLOBAL COMPETITIVENESS REPORT 2019: HOW TO END A LOST DECADE OF PRODUCTIVITY GROWTH

Ten years on from the global financial crisis, the world economy remains locked in a cycle of low or flat productivity growth despite the injection of more than $10 trillion by central banks. The latest Global Competitiveness Report paints a gloomy picture, yet it also shows that those countries with a holistic approach to socio-economic challenges, look set to get ahead in the race to the frontier. >more


BIS September 2019

Bank for International Settlements

BIS QUARTERLY REVIEW: SEPTEMBER 2019

The BIS Quarterly Review examines developments in international banking and financial markets. Published in March, June, September and December, it comprises a review of market developments over the past quarter, and special features that analyse topical economic and financial issues. This issue discusses how trade tensions and monetary policy affected asset prices, and includes a feature about the effects of the G-SIB framework on big banks' resilience and systemic importance. >more


ETFs

European Systemic Risk Board

CAN ETFS CONTRIBUTE TO SYSTEMIC RISK?

The Advisory Scientific Committee of the European Systemic Risk Board has recently published a report presenting the main channels through which Exchange-Traded Funds (ETFs) have the potential to affect systemic risk. ETFs are hybrid investment vehicles that track an index or a basket of assets (typically referred to as “constituent securities”) and are continuously traded on liquid secondary markets. >more


Negative Interest Rates and Humans

Deutsche Bank Research

NEGATIVE INTEREST RATES AND THEIR EFFECT ON HUMANS

What should an honest and law-abiding German citizen think when their finance minister, a high-ranking representative of the state, is investigating whether he can protect them from the actions of another state body, the central bank? This is exactly what the Bavarian Prime Minister Söder is calling for: a ban on negative interest on bank deposits (up to a certain level), whose chances of realisation are now being examined by the Federal Ministry of Finance. >more


LIBRA

Deutsche Bank Research

LIBRA – A GLOBAL CHALLENGER IN PAYMENTS AND FOR CENTRAL BANKS?

Facebook’s Libra project aims to establish both a private digital currency backed by a basket of hard currencies and a global payment network. It is thus challenging many established players in the financial system, including central banks, credit institutions and payment providers. Facebook can integrate Libra services into its digital platforms and benefit from strong network effects. In Europe, Libra would enter a competitive but fragmented digital payments market. As a currency, Libra will carry a foreign exchange risk for Europeans. But if the ECB drove interest rates deeply below zero, Libra could offer an easy digital way out. The flipside, though, would be a loss of sovereignty for Europe. >more


Central Bank Policy

Deutsche Bank Research

GLOBAL MONETARY MEDICINE ON THE WAY

Read on for a Deutsche Bank Research discussion of the recent shift in central bank policy and the implications for the global economy. The report also outlines key recent/upcoming political developments (new European leadership, Brexit, trade war, etc.), major risks in 2019, and updates cross asset market views. >more


Europe Survey 2019

Ernst & Young

HOW CAN EUROPE RAISE ITS GAME? EUROPE ATTRACTIVENESS SURVEY 2019

Although Europe fares well compared with other regions, appetite to invest there has dropped to a seven-year low. A cocktail of economic and political uncertainty, not just in Europe but around the world, has caused businesses to throttle back on foreign investment. However, our 2019 survey of over 500 international businesses reveals that, compared to other regions, Western Europe is now considered more attractive than at any point in the last ten years as a place to establish operations. What’s more, Eastern Europe is now considered the second most attractive region for investment. Five years ago, it ranked only fourth. >more


Economic Report 2019

Bank for International Settlements

ANNUAL ECONOMIC REPORT 2019

It was perhaps too good to be true. In 2017, it was unusual to see a synchronised global expansion at rates above estimates of potential so late in the upswing and, moreover, to project it to continue well into the future. Some deceleration was on the cards. But when it came, in the second half of 2018, it appeared much stronger than expected. It caused tremors in financial markets and anxiety about a possible impending recession. Faced with the prospect of a weaker economy and with an abrupt tightening of financial conditions, the major central banks put the very gradual monetary policy tightening on pause. The recession has not materialised. Still, as always, the question everyone is asking is: "What next?" >more


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