BofAML: Informes Europa

Redacción - Lunes, 29 de Enero

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Europe Economic Viewpoint: It’s not easy being small • Sweden and Switzerland are small open economies locked into the Euro area orbit in terms of inflation and monetary policy. •  They share the same trade offs: monetary independence vs FX volatility and vs financial stability.
•   FX importance for inflation means rate hikes independent of ECB unlikely. Riksbank could be 1-step ahead, SNB 1-step behind.

The European Credit Strategist: Breaking up is (not so) hard to do

•   Examples keep appearing of companies succumbing to shareholder-friendly pressure. Event risk remains a -ve for bondholders.
•   Europe is full of conglomerate companies that are ripe to be broken up, releasing shareholder value (and hurting bondholders)
•   Where might "break up" newsflow emerge next? Table 1 shows our conglomerate screen. Continental appears at the top.

 

FX Viewpoint: European FX Outlook

•   We are increasing our conviction in European FX. End of ECB QE marks a return to the norm for correlations. Go long SEK & NOK
•   GBP outlook is supported by transition put and high beta to global growth. Domestic politics remain an Achilles Heel
•   Removal of ECB QE Wedge is catalyst for sustained Scandi FX gains. Lower CHF remains high conviction. We like lower CHF/JPY

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