EEA News and Press, The European Equity Fund Inc. From 09/16/21

Developed market yield curves are displaying late-cycle dynamics. This is nowhere as obvious as on the GBP curve as hikes are being brought forward, and as the curve flattens. This makes it all the more difficult for long-end rates to rise. For further details see: Rates...

The lower-than-expected CPI pushed US rates back into the driving seat, taking Bunds for a ride. We are also watching hawkish ECB risks that could potentially narrow the UST-Bund spread. We think such tightening is more likely to be temporary and is more inclined to follow the ECB...

In addition to battery element shortages, the chip shortage has limited electric vehicle production. At the auto show in Munich last week, several auto executives commented on the chip shortage. Overall, the electrification of vehicles may be characterized by perpetual shortages for y...

The ECB is looking through higher headline inflation and inflation swaps. We doubt these will be enough to change easing expectations in December, but hawkish comment risks will remain a threat to carry trades. In the US, inflation prints have not affected breakevens much in recen...

The US employment data and the ECB meeting are behind us, and the Federal Reserve, Bank of Japan, Bank of England, and Norway's Norges Bank lie ahead. The general sense one gets by surveying the recent string of data is that economic activity has downshifted. With most of the rece...

The focus in the US shifts from the labor market to pricing pressures. EU economic and financial affairs ministers are meeting in Slovenia. The meeting concludes on Saturday, September 11. The UK releases August unemployment claims and the unemployment rate on Tuesday. For f...

Nearly 11 million U.S. jobs available, new report shows. ECB announces slowdown in monthly bond purchases. Is the global economic recovery still on track? For further details see: A Worker's Market: U.S. Job Openings Hit All-Time High

The ECB reduced PEPP purchases without causing a hawkish reaction. Its secret? Fanning hopes of more easing in December. We think an acceleration of APP is now the market’s base case, thus putting carry traders in the driving seat. Core rates should tread water from here, u...

We stay tactically overweight European equities with two key events on the horizon: a European Central Bank meeting and the German election. U.S. jobs growth in August was far below expectations. Yet, we caution that seasonality could be at play and a revision upwards is possible. ...

To date, 2021 has been as almost good as it gets for equity investors. Any slowdown in growth has yet to feed into consensus earnings forecasts which have continued to increase over the summer. Investors have few high-yielding alternatives for as long as real and nominal bond yiel...