EEA News and Press, The European Equity Fund Inc. From 03/21/21

Ned Davis Research estimates that a 2% yield in the US 10-year bond could lead the Nasdaq to fall 20%, and with it the entire stock market globally. A small bounce in yields would simply collapse the massive deck of cards of risk built into the economy when rates were manipulated down...

The EU is showing all the signs of a failing state, embarrassingly exposed by Brexit and the EU's political response. At a time of emerging lockdowns in the rest of the world, the EU is badly behind in its vaccination programme and is unlikely to fully emerge from its lockdowns before...

European stocks have lagged developed market peers because the regional economy has been especially hard hit. Weakness in European stocks reflects the macroeconomic environment. Finding promising investment candidates require a clearheaded focus on business fundamentals and cash f...

Last week, the ECB promised faster bond purchases to prevent a premature tightening of financial conditions. This unexpected move sent a strong signal: the central bank is determined to keep euro-area bond yields from rising at a time when US yields are under upward pressure. We'r...

No pushback against higher yields from the Fed and the BoE leaves the door open for further rises. In the near term, an extension of the SLR might provide temporary respite. That does not relieve the ECB of its struggle to keep a lid on rates. The large TLTRO is scant consolation....

Chair Powell glitched just a tad yesterday, but the accomodative promise remains resolute. The BoE is on a not too dissimilar wavelength, while the ECB is just a bit... well, stuck. All doves, but different types. The ECB needs to be a true dove. The Fed probably does not have to ...

No rate or QE change likely from the Fed - that's the easy bit. But will they hike the rate on excess reserves? Not expected (but they actually should). Will they extend the SLR break for US banks? They likely will (but probably shouldn't). Will the dot plot move? Likely not much....

In the first lockdown, surging savings rates across the Western hemisphere were mainly the result of involuntary savings. As a result, the reopening of economies led to an almost full reversal of the excess savings into consumption. In 2021, the rotation from savings into consumpt...

Bund yields decline again, just as the ECB needs to build credibility in its new efforts. But as struggles with the vaccination rollout and high infection rates sour general sentiment in the EU, the part played by ECB buying is hard to untangle. The curve feels supply pressure, bu...

The European Central Bank is reacting to rising interest rates in the world, particularly in the United States, by stepping up to increase security purchases. The eurozone and other countries in the world are out of sync with the United States in terms of achieving economic recovery, ...