EEA News and Press, The European Equity Fund Inc. From 04/18/21

The euro remains the most undervalued of the major currencies, but not as cheap as it was a year ago when it was nearly 29% below the OECD's fair value calculation. The ECB has been encouraging a robust fiscal response, and while individual countries are boosting counter-cyclical spen...

The global economic recovery is gaining momentum as the world’s two largest economies continue to deliver robust economic readings. US stocks are steadily making fresh record highs and that could continue if Treasury yields take their time in recapturing the highs made at the e...

The EU has outlined the funding strategy for the Next Generation EU (NGEU). Once ratified by all member states it should start issuing in July. The ECB's PEPP buying will have slowed again by then and the focus could turn to other political factors. US focus today is on retail sal...

As the global economy recovers, inflationary pressures are building, and price increases are moving downstream. Our Materials Price Index (MPI) has surged 40% since mid-November 2020, reaching its highest level since early 2014. World real GDP is projected to advance 5.1% in 2021 ...

A jump in US CPI today is well-flagged, but it should be a wake-up call to what we think will be stickier inflation in the coming months, if not years. This would render the Fed's position increasingly stretched and the policy-sensitive 5Y sector has more room to cheapen. EUR rate...

Recently released data from March suggests that the economic recovery is gaining momentum across Europe. IHS Markit’s manufacturing PMI (purchasing managers’ index) for the eurozone reached a level of 62.5 last month. The developments in Greenland are a reminder that...

Investors in European stocks are looking beyond the present COVID outbreaks, vaccination shortfalls, and some recently imposed shutdowns to the expected strong recovery in the coming months. The European Commission's Economic and Sentiment Indicator (ESI), produced by the Business and...

We look through potential reasons for the April bounce in fixed income. A stubborn Fed and gloomy eurozone outlook provide the best, if unsatisfactory, explanations. Upcoming US inflation data and supply offer the most likely drivers for a return to the higher rates trend. F...

FOMC minutes reference the IOER (again); with SOFR stuck at 1bp. We think the Fed should hike it already. The ECB's detailed purchase data for February/March shows little change of strategy beyond the pick-up in purchase volumes of late. Today's ECB minutes might document some con...

Europe's Covid-19 and vaccination trouble may be temporary, but the US recovery is powering ahead. Economic and cash flow divergences are likely to bring wider USD-EUR rates differentials. With the risk of a spike this quarter. For further details see: USD-EUR Rates Dive...