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Economic Research
Week in Focus
.
10 October 2014
How Emerging Markets will slow the euro zone
Economic data in the euro zone and especially Germany have been quite poor lately. This is
primarily due to the weakening in demand from emerging markets. Our analysis suggests
that this weakness is likely to remain in place, partly because the looming Fed rate hike will
end the decade of cheap money in many emerging markets whilst many BRICs have
domestic problems of their own. As the drag on the euro zone from this source intensifies,
this is likely to hasten the ECB's decision to buy government bonds.
Page 2
The Week in Focus in 100 seconds
Please follow this link for a video summary.
Growth differential in favour of Emerging Markets is narrowing
Real GDP, year-on-year change in per cent, growth differential in percentage points; 2014 + 2015:
Commerzbank forecasts
10
8
6
4
2
0
-2
-4
1980
1985
1990
Growth differential
1995
2000
Advanced economies
2005
2010
2015
Emerging markets
Source: IMF, Commerzbank Research
ECB QE: Allocation probably by capital key. Assuming the ECB engages in QE, the
question of how it will distribute its bond purchases will be a controversial one. We believe
that an allocation based on the ECB capital key is the most likely variant as the alternatives
under discussion have even more drawbacks from the ECB’s perspective.
Page 5
Product Idea: Range Bet Forward in EUR-JPY. Markets are starting to price in more ECB
easing but rather less from the BoJ. This will likely result in EUR-JPY trading in a tight range
over the coming year. We suggest that customers participate in a EUR-JPY Range Bet
Forward in order to profit from such a development.
Page 6
Outlook for the week of 13 October to 17 October 2014
Economic data: The data next week should confirm that the US economy is continuing to
grow at a solid rate. In Germany, recent weak economic data releases for October suggest
that the ZEW index will come in below 0 for the first time since end-2012.
Page 8
Bond market: With economic concerns likely to persist in the near term, Bunds ought to
remain supported, whilst the hunt for yield appears to be running out of steam despite ongoing ECB QE speculation.
Page 12
Chief economist
FX market: We view the recent USD weakness as temporary and the current phase
represents merely a correction, rather than the end of USD strength.
Page 13
Dr Jörg Krämer
Equity market: After a weak October we look for the DAX soon to find its trough and expect
it to recover in November and December following the recent soft patch.
Page 14
Editor
Commodity market: Downward pressure on the oil price is likely to continue for the time
being although base metal prices are expected to remain fairly static.
Page 15
+49 69 136 23650
[email protected]
Peter Dixon
+44 20 7475 4806
[email protected]
research.commerzbank.com
Bloomberg: CBKR
Research APP available
For important disclosure information please see end of this document
Dr Jörg Krämer
Tel. +49 69 136 23650
How Emerging Markets will slow the euro zone
Recent economic data in the euro zone, particularly in Germany whose economy up to
now has been robust, have turned weaker. This is primarily due to the weakening in
demand from emerging markets. Our analysis suggests this is likely to remain the case,
partly because the looming Fed interest rate hike will end the decade of cheap money in
many emerging markets. In addition, many BRICs have domestic problems of their own.
This suggests that the growth advantage which many emerging markets have enjoyed
vis-à-vis the advanced economies is likely to narrow further, thus reducing the impetus to
the euro zone economy. This is likely to hasten the ECB's decision to buy government
bonds.
Emerging markets: Economic growth has stabilised …
Many investors are concerned about growth in emerging markets. These concerns are
understandable particularly in view of Chinese developments, notably falling house prices. Whilst
we hold to a below-consensus view for Chinese growth, industrial production across emerging
markets as a whole is still posting stable growth of around 5%. Furthermore, the purchasing
managers’ indices and the OECD leading indicators for EM are tending sideways and are not
signalling a slump.
… but the growth gap vs. advanced economies is shrinking …
However, the emerging markets have not been able to profit from somewhat higher growth in the
advanced economies is worthy of further examination. The growth rate of industrial production in
the advanced economies moved into positive territory in 2013 (chart 1), without output growth in
EM gaining any momentum. The same is true for GDP (chart 2). The growth gap between
emerging markets and industrial countries has thus narrowed further this year – to around 3
percentage points compared to an average in excess of 6 percentage points in the period 2007
to 2009.
… and import demand is barely rising
Another factor pointing to domestic problems in the EM space is the slowdown in demand
growth in the region since the turn of the year. Growth in EM import volumes has weakened from
around 5% in 2012 and 2013 to 2½% recently (chart 3). This generally applies to Asia, Eastern
Europe and Latin America. The German economy is being particularly affected at present, which
explains why the German purchasing managers’ index for the export-oriented manufacturing
sector has fallen at a sharper rate than the PMI for other euro zone countries. This was the main
reason why a week ago we lowered our German growth forecast for this year and next to 1.3%.
Data released this week showing weak industrial orders and production in August suggest that
third quarter German GDP is likely to have stagnated at best.
CHART 1: EM Industrial production has stabilised …
CHART 2: ... but the growth gap is narrowing
Industrial production, year-on-year change in per cent, growth
differential in percentage points, moving 5-month average
Real GDP, year-on-year change in per cent, growth gap in
percentage points; 2014 + 2015: Commerzbank forecasts
10
10
8
8
6
6
4
4
2
2
0
0
-2
-4
-2
2011
2012
gap
2013
Advanced economies
Source: Centraal Planbureau, Commerzbank Research
2
1980
2014
Emerging markets
1985
1990
Growth differential
1995
2000
Advanced economies
2005
2010
2015
Emerging markets
Source: IMF, Commerzbank Research
research.commerzbank.com
10 October 2014
An end to the decade of cheap money
In future, emerging markets are set to suffer an additional burden due to the fact looming Fed
rate hikes will bring an end to the decade of cheap money: In its annual report, the Bank for
International Settlements (BIS) showed that the average central bank rate in emerging markets
over the past ten years was well below the so-called Taylor interest rate, which would have been
appropriate given trends in inflation and growth (see box on page 4). Central banks in many
emerging markets have clearly copied the Fed’s loose monetary policy in order to prevent their
currencies from appreciating. Our update of the calculations made by the BIS shows that
monetary policy in emerging markets is still too expansionary, even though numerous central
banks raised key interest rates last year after their currencies came under pressure following the
Fed’s announcement that it would begin tapering its asset purchases. If the Fed were to raise
the funds rate in Q2 2015, this will increase the pressure on EM central banks to hike interest
rates further, and thus close the gap to the Taylor rate. The decade of cheap money would then
clearly be at an end, which would further narrow the growth advantage which EM currently enjoy
(Chart 2), even though it will not narrow to the levels of the 1980s because many emerging
markets are fundamentally stronger than they were then. They are now much more closely
integrated into the international economy and public debt trends are much more favourable than
in the advanced economies.
The self-made problems of emerging markets
The emerging markets are not only suffering from the end of cheap global money but also as a
result of their own self-made problems. In the past few years, negative developments have
emerged in the so-called BRIC countries:
•
Brazil: The country is not saving enough, partly because, unlike Chile, it does not have a
capital-backed pension system, thus state consumption spending is too high. This means
that private and public investment relative to GDP are lower than almost every other
emerging market, although the country will import capital amounting to 3½% of GDP this
year. The Brazilian economy will probably barely grow this year (forecast: +0.3%).
•
Russia: By the end of the commodities boom Russian growth had already slowed
considerably, from rates above 5% in the years prior to the Lehman bankruptcy to an
estimated 0.3% this year. Outside the huge commodities sector (20% of GDP), no dynamic
business sector has emerged, which is also partly due to unfavourable institutional
conditions – notably the legal system and problems with property rights. The Ukraine conflict
has added to the uncertainty.
CHART 3: Demand from EM is clearly losing momentum
CHART 4: Monetary policy in EM is much too loose
Real imports of emerging markets, year-on-year change in per cent,
unsmoothed and 5-month average
Average key interest rates of emerging markets, actual and based on
Taylor rule, in %, see box on page 4
14
12
10
8
6
4
2
0
2011
2012
2013
Source: Centraal Planbureau, Commerzbank Research
10 October 2014
2014
Source: Datastream, Commerzbank Research
research.commerzbank.com
3
•
India: Economic growth has dipped below 5% in the last two years, after topping 8% on
average from 2003 to 2011. Institutional conditions did not keep pace with strong economic
growth in the early years of the century. For example, outdated land tenure laws make it
difficult for businesses to buy the land required to boost growth. Furthermore, transport
infrastructure (roads, ports, railways) are in a poor state. Hopes are now directed at new
Prime Minister Modi.
•
China: After many years of sharply rising house prices, prices have been falling for several
months. This will hit the over-sized construction sector (which, including estate agents,
amounts to almost 20% of GDP), and regional authorities, who have recently been investing
approximately half their revenues from land purchase (2013: 7.2% of GDP) in infrastructure.
Emerging Markets: Growth edge narrows
The self-made problems in BRIC countries and an end to the decade of cheap money suggest
that the growth advantage which emerging countries enjoy over the advanced economies will
narrow further – from 3.4 percentage points last year to 2¾ percentage points in 2015. Growth in
the emerging markets will therefore not profit from somewhat higher growth in advanced
economies (USA: 2014: +2.2%; 2015: +2.9%) but stick at around 4½%. While growth in China
should decline, due partly to a weakening of the property sector (2014: +7.3%; 2015: +6.5%), it
should be a little higher in India, not least because of the new government (2014:+5.8%; 2015:
+6.2%).
Less impetus from emerging markets - a further argument for QE
Less impetus from the emerging markets is a further argument supporting our forecast that euro
zone GDP will grow by only 0.8% in 2015, i.e. much less than the ECB still expects (+1.6%).
Disappointment about growth and an inflation rate well below the 2% mark will serve as an
argument for those ECB governing council members in favour of broad-based government bond
purchases (QE). They will additionally point out that the ECB cannot buy enough ABS and
covered bonds to increase its balance sheet by 1000 billion euros, given the lack of liquidity. We
still expect the purchase of government bonds, although this is more likely to happen at the
beginning of 2015 rather than this year. In the medium term, this will continue to push down the
EUR-USD exchange rate (forecast for end of 2015: 1.15).
Taylor rule for emerging markets
In its annual report, the Bank for International Settlements (BIS) reiterated that key interest rates
in emerging markets have been much too low for at least the last ten years. 1 To support this
view, the BIS also uses the so-called Taylor rule, which determines the appropriate key interest
rate based on capacity utilisation rates and the deviation of inflation from target. For the
industrial countries, this rule has in the past generally been a useful indicator of an overlyexpansionary monetary policy and thus warned of the dangers of a monetary-driven market
distortions or even a bubble.
We have applied this analysis to calculate a Taylor rule for the emerging markets. Like the BIS,
we have determined trend growth in the emerging markets using a Hodrick-Prescott filter. As
many central banks do not have an explicit inflation target, we have likewise calculated an
underlying inflation trend using the Hodrick-Prescott filter and interpreted this – like the BIS – as
the inflation target. We have calculated two versions of the rule; in the one version we use the
consumer price index as our inflation measure, in the other the GDP deflator. Chart 4 compares
the average result of both equations and their range with the actual trend in key interest rates
(where we aggregate countries together using their GDP weights).
1
4
See http://www.bis.org/publ/arpdf/ar2014_5_de.pdf, page 109
research.commerzbank.com
10 October 2014
Dr Michael Schubert
+49 69 136 23700
ECB QE: Allocation probably by capital key
We still believe that the ECB will ultimately announce broad-based government bond
purchases (QE). The question of how the central bank will distribute the purchases
across individual member states is, however, controversial. We think that allocation
according to the ECB capital key is the most likely variant as the alternatives under
discussion (allocation by market share, risk-weighted approach) probably have more
drawbacks from the ECB’s perspective.
The ECB is reportedly discussing three alternatives for allocation:
•
The ECB uses the shares of euro-zone countries in ECB capital. The share of capital is
calculated in equal parts from the share of the respective country in the overall population
and GDP. In this case, 26% of QE purchases would go German government bonds, 20% to
France and 18% to Italy (chart 5).
•
If the ECB bases its distribution on the market shares of government bonds (Source:
Bloomberg; all maturities, including linker and floater), the split would be 27% Italian, 23%
French and 19% German.
•
The risk-weighted approach stresses that the central bank – as is customary in other
countries – should favour bonds with top ratings (many German bonds, fewer Spanish and
Italian bonds) to minimise the default risk.
However, the weighting by market shares and the risk-weighted approach have decisive
drawbacks for the ECB. The weighting by market shares amounts to the ECB buying more
government bonds from those countries where issuance has been high. This could leave the
ECB open to the charge of trying to circumvent the prohibition of monetary financing. A further
counter-argument is that the highest shares will be Italian and French bonds, the two countries
under heavy criticism for their lack of structural reforms and consolidation. Some Governing
Council members had only agreed to the OMT asset purchase programme because buying was
tied to certain requirements for governments.
One problem with the risk-weighted approach is that it cannot be determined objectively how
high the share of (say) German bonds should be compared to Italian and Spanish bonds, in
order to ensure that credit default risk remains low. Moreover, many Governing Council
members would presumably reject this proposal on the grounds that countries such as Germany
received most support when they needed it the least.
Consequently, if the ECB buys government bonds on a broad base, allocation should be as “fair”
and “equal” as possible. This is also important from a legal perspective as the German Federal
Constitutional Court in its judgment on OMT was particularly critical of the fact that these
purchases were “selective”. A weighting by ECB capital key, i.e. by shares of population and
economic strength, not only appears plausible but is also tried and tested. After all, it is
stipulated in the EU treaties that the ECB Governing Council will use this key when deciding on
central bank capital and questions of gains and losses.
CHART 5: Euro zone: QE allocation probably by ECB capital key
ECB capital key and market shares of euro zone government bonds in per cent, S&P rating
30
25
20
15
10
5
0
S&P
DE
FR
IT
ES
NL
BE
AT
PT
GR
AAA
AA
BBB
BBB
AA+
AA
AA+
BB
B
Capital key
market share
Source: ECB, Bloomberg, Commerzbank Research
10 October 2014
research.commerzbank.com
5
Product idea: Range Bet Forward in EUR-JPY
Peter Kinsella
Tel. +44Tel.
207+49
475 (0)
3959
69
136 41250
Profiting from EUR-JPY staying in a 130 – 145 range
Markets are starting to price in both the ECB and the BoJ engaging in quantitative easing
to a greater and lesser extent respectively. The result of this is that EUR-JPY is likely to
trade in a tight range over the coming year. We suggest that customers participate in a
EUR-JPY Range Bet Forward in order to profit from such a development.
Since the beginning of September both the EUR and JPY have traded almost in lockstep against
the USD. Investors should get used to such a phenomenon because it could well be a taste of
things to come. Inflationary developments in the euro zone continue to give cause for concern.
Due to the continued fall in inflation readings in the euro zone, market participants are already
beginning to price in the prospect of broad based QE by the ECB. The real goal of such a
programme, although the ECB will never admit it, is to weaken the EUR. This is the only way in
which ECB can hope to achieve higher inflation levels in the short term, essentially by importing
it through a weaker exchange rate. All told the outlook for the EUR in the coming months is for
further weakness.
At the same time, developments in the Japanese economy also lead market participants to
question whether the BoJ is doing enough to achieve the 2% inflation target. Growth data in Q2
disappointed such that markets are also starting to price in even more BoJ quantitative easing.
These developments, along with USD appreciation, led to USD-JPY trading from levels around
105 towards 110 in recent weeks. The combination of EUR and JPY weakness in our view
means that EUR-JPY will likely trade in a tight range over the coming months. Our forecast
shows an incredibly tight range around 138 over the coming year. We therefore suggest that
customers participate in a EUR-JPY Range Bet Forward in order to participate from these
developments.
Product idea: Range Bet Forward in EUR-JPY
Spot rate (sample calculation)
137.28
Upper limit (trigger)
145.00
Lower limit (‘trigger’)
130.00
Nominal
EUR 1,000,000
Duration
6 months
Cost
Zero cost
The Range Bet Forward allows customers to sell JPY and buy EUR at 135.00 if the range
of 130.00 – 145.00 holds during the 6 month window. Investors participate in the structure
on lower levels in EUR-JPY down to 130.01 if the range holds.
If the range 130.00 – 145.00 is triggered during the 6 month window, the investor has a
synthetic forward where he has to buy EUR and sell JPY at 140.50.
6
research.commerzbank.com
10 October 2014
Major publications from 2 – 9 October 2014
Economic Briefing: Germany heading for a weak Q3
At -4%, the decline in industrial output in August even outpaced our below-consensus forecast.
The late timing of the summer holidays was key, favouring production in July but hitting output
considerably in August. Consequently, another countermove must be expected in September.
Yet the trend is pointing down, with the German economy in the third quarter likely to have
stagnated at best. more
EM Briefing: Brazil – An unexpected run-off
Dilma Rousseff from PT and Aecio Neves from PSDB will be in the ballot on 26 October in the
election run-off. These results are somewhat unexpected as this scenario had not been
envisioned until a few days ago, and then not in a clear way. At this juncture, who wins Marina
Silva’s supporters is the key to deciding the second-round. Thus polls, air-time and debates will
be of paramount importance to understand short-term market behaviour. more
FX Hotspot: ARPI² update – Uncertainty rose further
Compared to last week, the ARPI² rose 0.2 index points which was in particular due to
somewhat higher credit and commodity risks. Commodity risks rose as oil prices fell significantly
due to a price cut by Saudi Arabia and to speculation of weaker demand as global growth
forecasts have been revised down. The increase of credit risks was partly due to a change of
index characteristics in the iTraxx Crossover data series which we use to describe risks in this
asset class. more
FX Hotspot: Our G10 – FX outlook
The two most important central banks, Fed and ECB, are pursuing opposing monetary policy
paths. That affects EUR-USD as well as other G10 currencies, with some of the central banks
concerned facing notable challenges. Please find below an overview over the different monetary
policies as well as the other economic conditions affecting the individual G10 currencies. more
Mid-cycle soft patch – From Fed rate hike fears to global growth
concerns (and back?)
Market sentiment flipped from Fed rate hike fears to global growth concerns over the last month.
Global growth is softening mainly due to idiosyncratic but synchronised weakness in the EM
spilling over to exposed economies such as Germany. We firmly believe the scenario of a midcycle soft patch is the most likely, as opposed to a more severe slowdown of global growth
threatening to end the cycle. This scenario seems largely priced in by markets. The retreat in risk
assets is not far from what we saw during mid-cycle soft-patches in the last two cycles and risk
assets should find support from bearish sentiment, positioning and a favourable seasonality. We
recommend looking out for buying opportunities in risk assets. Moreover, once the current
growth concerns abate, Fed/BoE rate hike discussions are likely to intensify again. We stick to
our recommendation of a well-diversified moderate pro-risk stance. more
10 October 2014
research.commerzbank.com
7
Preview – The week of 13 to 17 October 2014
Time
Region Indicator
Period
Forecast
Survey
Last
Monday, 13 October 2014
No relevant data are due for release
Tuesday, 14 October 2014
•
GBR
CPI
CPI ex tobacco
CPI
Sep
Sep
Sep
10:00
GER
ZEW Index
Oct
10:00
EUR
Industrial production
Aug
7:45
FRA
9:30
yoy
0.4
126.13
0.3
1.5
-5.0
–
–
0.2
1.4
0.0
0.4
126.38
0.4
1.5
6.9
mom, sa
yoy
-1.4
-1.7
1.0
2.2
mom
yoy
Wednesday, 15 October 2014
9:30
•
13:30
GBR
Claimant count change
Aug
mom, k, sa
-35
-35
-37.2
USA
Wages (three-month average)
Unemployment rate (ILO)
Retail sales
Aug
Aug
Sep
yoy
%, sa
mom, sa
0.7
6.1
-0.1
0.8
6.1
-0.1
0.6
6.2
0.6
Sep
Oct
Sep
mom, sa
sa
mom, sa
0.0
15.0
0.1
0.2
20.0
0.2
0.3
27.5
0.0
CPI, final
Sep
yoy
0.3
0.3
0.3(p)
CPI excl. food and energy, final
Initial claims
Industrial production
Philadelphia Fed Index
NAHB Index
Sep
Oct 11
Sep
Oct
Oct
yoy
k, sa
mom, sa
sa
sa
0.8
285
0.4
15.0
59
0.8
–
0.4
20.0
59
0.7(p)
Housing starts
Housing permits
Sep
Sep
SAAR, k
SAAR, k
985
1035
1000
1035
956
998
Consumer confidence (Univ. of Michigan),
preliminary
Oct
sa
82.8
84.2
84.6
Retail sales ex autos
Empire State Index
PPI, final demand
USA: Federal Reserve releases Beige Book (19:00)
Thursday, 16 October 2014
10:00
13:30
14:15
15:00
EUR
USA
-0.1
22.5
59
Friday, 17 October 2014
13:30
14:55
USA
Source: Bloomberg. Commerzbank Economic Research; *Time BST (subtract 5 hours for EDST. add 1 hour for CEST). # = Possible release; mom/qoq/yoy: change
to previous period in percent. AR = annual rate. sa = seasonal adjusted. wda = working days adjusted; • = data of highest importance for markets.
8
research.commerzbank.com
5 September 2014
Economic data preview:
Dr Christoph Balz
Tel. +49 69 136 24889
USA: No clear signals
A large number of indicators are due out in the US next week. On balance, the data
should confirm the view that the US economy continues to grow at a solid rate and thus is
faring better than average in an international comparison. In Germany, the recent releases
of weak economic data for October suggest that the ZEW index will come in below 0 for
the first time since the end of 2012.
Next week’s US economic data should be dominated by special factors. Those indicators that
disappointed recently will probably increase noticeably, while those indicators that turned out
positive of late will likely come in weaker. Retail sales presumably declined in September by
0.1% on the month (consensus: -0.1%). This is mainly suggested by significantly lower auto
sales (-6.0%). But this is not indicative of a general weakness in consumption. The recent
decline in the petrol price overstates the lull in September, and sales had risen strongly by 0.6%
in August. The trend driven by the labour market recovery thus still points clearly upwards. This
is especially true for the core business excluding autos, building material and sales at the gas
pump (chart 6).
In contrast, housing starts in September should have recovered from the 14% drop in August,
when construction permits exceeded housing starts. Our forecast of 985,000 housing starts for
September (consensus: 1,000,000) would mean an increase of 3% on the month.
Industrial production also declined in August by 0.1% due to a one-off effect in the automotive
industry. But for September, the usual indicators such as hours worked in manufacturing lead us
to expect a gain. Moreover, it is to be assumed that energy production rose considerably. Owing
to above-average temperatures, more energy was presumably used for operating air
conditioners. We forecast an increase of 0.4% in industrial production (consensus: 0.4%).
Prospects for manufacturing remain favourable, though perhaps not quite so exceptionally good
as they were only recently. The first incoming regional survey results for September will likely
turn out somewhat weaker than in August, as the export outlook has become cloudier given the
malaise in important markets and on account of the strong dollar. The Empire State index and
the Philly Fed index should each fall to 15, though this would still be an above-average level.
Germany: Economic blues
The recent weakness in German economic data (which was also partly attributable to special
factors) has considerably intensified concerns about a plunge in German economic activity.
Alongside the comparable component of the Sentix survey (chart 7), this can probably be
gleaned from the ZEW index, which we expect to have fallen to -5.0 (consensus: 0.0).
CHART 6: USA – retail sales have revived
CHART 7: Germany – ZEW back below zero?
Retail sales in the core business excluding autos, building material
and gasoline, in %
ZEW index for economic expectations in Germany; component of the
Sentix survey on the economic expectations of institutional investors
in Germany
1.5
5.0
1.0
4.0
0.5
3.0
0.0
2.0
-0.5
1.0
-25
0.0
-50
2009
-1.0
Jan-14
Mar-14
May-14
month-on-month (LS)
Source: Global Insight, Commerzbank Research
10 October 2014
Jul-14
50
100
25
50
0
0
-50
-100
2010
2011
2012
2013
Sentix (LS)
year-on-year (RS)
2014
ZEW (RS)
Source: Global Insight, Commerzbank Research
research.commerzbank.com
9
Central Bank Watch (1)
Fed
From the Fed's perspective, the labour market is still
substantially underutilised. This was the message at least
from the minutes of the Fed meeting on 16/17 September.
For many FOMC members, evidence of this comes from the
weakness of weak growth. This correlation does not
convince everyone though, as some participants at the
meeting regard low wage growth as a consequence of the
fact that wages had not fallen during the recent recession.
Downside wage pressure had therefore built up, which is
also preventing higher pay growth even in an improved
economic environment, according to this view. Note that the
Fed meeting took place before publication of the latest very
robust employment report. Other data such as job vacancies,
which have risen to a 13-year high, likewise cast doubts
about the view that the labour market is still substantially
underutilised. That said, the Fed decided, in line with
expectations, to maintain its waiting stance, especially as it
expects inflation to move towards the 2% target only "in the
coming years". The minutes of the meeting emphasise once
again, however, that everything depends on the data. This
also means that a reaction might come faster than currently
expected.
Bernd Weidensteiner
+49 69 136 24527
CHART 8: Expected interest rate for 3-month funds (USD)
2,0
1,5
1,0
0,5
0,0
current Dez 14
Futures
09.10.14
Mrz 15
Jun 15
02.10.14
Sep 15
Dez 15
Commerzbank
TABLE 1: Consensus forecasts Fed funds rate
Q4 14
Q2 15
Q4 15
Consensus
0.25
0.25
1.00
High
0,50
1.00
2.00
Low
0.25
0.25
0.25
Commerzbank
0.25
0.50
1.50
Source: Bloomberg, Commerzbank Research
ECB
ECB vice president Constancio emphasised that “the
measures decided in the past few months mark a new phase
in the ECB’s approach. With these new measures, the
Governing Council demonstrates that we are ready to actively
steer the size of our balance sheet towards significantly larger
levels.” In our view, the balance sheet will increase only
moderately as a result of the existing measures. This is one
reason why we expect that in the end the ECB will broaden
the scope of assets purchases by including government
bonds. Constancio clarified that an important condition for
considering purchases of Greek and Cypriot ABS/covered
bonds is that “these countries must be under a European
programme”.
According to ECB’s Weidmann, “with the recent decisions, the
ECB’s monetary policy approach has changed from programs
specifically aimed at credit easing towards a quantitative
easing philosophy. This is an important policy shift. Against
the background of the announced target for the balance
sheet, I see a risk that we will overpay for these assets. That
would represent a transfer of risk … to the taxpayers.”
According to ECB’s Knot, the central bank cannot ensure a
sustainable recovery on its own. Governments must take “farreaching” economic reforms.
Dr Michael Schubert
+49 69 136 23700
10
CHART 9: Expected interest rate for 3-month funds (EUR)
1,0
0,8
0,6
0,4
0,2
0,0
current Dez 14
Futures
09.10.14
Mrz 15
Jun 15
02.10.14
Sep 15
Dez 15
Commerzbank
TABLE 2: Consensus forecasts ECB minimum bid rate
Q4 14
Q2 15
Q4 15
Consensus
0.05
0.05
0.05
High
0.05
0.05
0.25
Low
0.05
0.05
0.05
Commerzbank
0.05
0.05
0.05
Source: Bloomberg, Commerzbank Research
research.commerzbank.com
10 October 2014
Central Bank Watch (2)
BoE
As expected, the BoE continued to leave interest rates and
the volume of asset purchases on hold this month but the
debate about the future course of monetary policy has
become more nuanced. This is partly the result of increasing
headwinds from the euro zone but is also due to some
indications of slowdown in the domestic economy. Not only is
the housing market failing to gain momentum, but the PMIs
have come off their recent highs, and it seems likely that Q3
GDP growth slowed from the high of 0.9% q-o-q reported in
Q2. One of the interesting questions over the coming weeks
will be whether the two MPC dissenters who have voted for a
rate increase will change their mind. Messrs McCafferty and
Weale have argued that the recent decline in unemployment
poses wage inflation risks. Not only is there no evidence of
this in the data, but recent revisions to productivity figures
indicate that performance has been less weak than previous
national accounts data suggested, which further weakens
wage risks. Market pricing suggests that less weight is being
assigned to the likelihood of an increase in the early months
of 2015, with the probability of a 25 bps increase in Q1 now
only slightly above 60%. The SONIA curve also indicates that
a 25 bps move is now fully priced only for next summer.
Peter Dixon
+44 20 7475 4806
CHART 10: Expected interest rate for 3-month funds (GBP)
2,0
1,5
1,0
0,5
0,0
current
Dez 14
Mrz 15
Jun 15
Sep 15
Dez 15
Futures
09.10.14
02.10.14
Commerzbank
RBNZ (New Zealand)
At the beginning of September, the RBNZ left its key interest
rate unchanged, as it had previously announced it would.
Since March it has increased the rate by 100 basis points to
3.5%, to counter the danger of the economy overheating and
to dampen inflation risks. The RBNZ now wants to await the
effects of the steps taken so far and has trimmed prospective
rate hikes significantly. Furthermore, amid sharply falling
export prices, it has reiterated that the high external value of
the NZD is "unjustified and not sustainable". Actual
intervention followed the central bank's words at the end of
September, which temporarily put the NZD under substantial
pressure.
Leading indicators have signalled moderate economic growth
lately. However, a markedly weaker NZD should give the
economy new impetus as it improves business
competitiveness. At the same time, it strengthens the price
pressure in the medium term through rising import prices.
The RBNZ is watching this closely. So far, though, inflation
data has remained in the target corridor and NZD
depreciation has been limited. Furthermore, the growth
outlook in important export markets has deteriorated. We
therefore do not expect the RBNZ to increase interest rates
further at least before spring 2015 – and certainly not at its
next meeting at the end of October.
CHART 11: Expected interest rate for 3-month funds (NZD)
5,0
4,5
4,0
3,5
3,0
current
Dez 14 Mrz 15 Jun 15
Futures
09.10.14
02.10.14
Sep 15
Dez 15
Commerzbank
Elisabeth Andreae
+49 69 136 24052
10 October 2014
research.commerzbank.com
11
Bond market preview:
Rainer Guntermann
Tel. +49 69 136 87506
Tailwind for Bunds
Ten-year Bund yields have dropped to a new all-time low. With economic concerns likely to
persist in the near term, Bunds ought to remain supported, whereas the hunt for yield
appears to be running out of steam despite ongoing ECB QE speculation. Short term, we
continue to recommend a cautious stance with regard to periphery spreads, but maintain
our strategic spread targets with markedly lower spreads.
TABLE 3: Weekly outlook for yields and curves
Yields (10 years)
Curve (2 - 10 years)
Bunds
US Treasuries
Sideways
Moderately higher
Neutral
Steeper
Source: Commerzbank Research
Outlook for the Bund
future,
13 – 17 October
Economy
↓
Inflation
→
Monetary policy
↑
Trend
→
Supply
→
Risk aversion
↑
Ten-year Bund yields have fallen to a new record low. As expected, economic concerns are
taking hold, and inflation expectations are still edging lower. At the same time, volatility in the
euro bond markets has increased, and the decline in peripheral spreads has come to a halt for
now (chart 12). Whilst absolute yields in Spain and Italy are still near their record lows, Bund
yields are falling steadily (chart 13). Short term, at least, the hunt for yields looks set to fade.
At first glance, it comes as a surprise that peripheral bonds recently underperformed Bunds
despite increasing speculation about a broad-based ECB bond-buying programme. After all, this
speculation, in particular, had previously caused yields and spreads in the periphery to fall.
One reason why the ECB’s recent decisions triggered only a temporary reduction in spreads is
that Bunds would be at the top of the shopping list should the ECB decide to buy bonds (see
also page 5). Moreover, given the flatter yield curve, peripheral bonds with longer maturities, in
particular, appear to be less attractive at current levels, as they offer a less favourable risk/return
profile amid rising volatility and, consequently, increasing risk.
With further possible stumbling blocks looming for the peripheral markets in the weeks ahead,
we ought to see persistently high volatility. Although the Spanish Constitutional Court has for
now suspended the planned referendum on independence in Catalonia, it is not yet off the table.
Furthermore, markets could be driven by the headlines surrounding the results of the bank
stress test due to be released at the end of the month. For the weeks ahead, we continue to
recommend a cautious approach to peripheral exposure. At the same time, we stick to our
strategic spread targets. By the beginning of next year, the spread of ten-year Spanish sovereign
bonds versus Bunds should decline to 75 basis points.
CHART 12:
CHART 13: Bunds remain supported
Hunt for yield is running out of steam
Spreads of ten-year Spanish and Italian sovereign bonds versus
Bunds, in basis points
Bund yields, in %
400
2.0
350
1.8
300
1.6
250
1.4
200
1.2
150
100
Jan-13
1.0
Jul-13
Jan-14
SPA
Source: Bloomberg, Commerzbank Research
12
Jul-14
ITA
0.8
Jan-14
Mar-14
May-14
Jul-14
Sep-14
Source: Bloomberg, Commerzbank Research
research.commerzbank.com
10 October 2014
FX market preview:
Ulrich Leuchtmann
Tel. +49 69 136 23393
How much USD strength will the US take?
Fears of a US central bank reaction to the dollar strength of the past few months have
caused the US dollar to ease. However, these concerns are likely to be unfounded. So
what we are seeing is a correction, rather than the end of the USD strength.
TABLE 4: Expected weekly trading range
Range
Bias
Range
Bias
EUR-USD
1,2550-1,2950
Ô
EUR-GBP
0,7700-0,7925
Î
EUR-JPY
137,00-141,00
Î
GBP-USD
1,6100-1,6500
Ô
USD-JPY
107,50-111,00
Ò
EUR-CHF
1,2025-1,2120
Î
Source: Commerzbank Research
The minutes of the Fed’s last FOMC meeting suggest that some FOMC members are concerned
about the negative effects of the recent dollar appreciation on growth and inflation. That is
nothing new though. The well-known doves (above all Charles Evans and Bill Dudley) have
made comments along these lines for some time. That is hardly surprising as both regional Fed
Presidents have always been looking for reasons as to why the ultra-expansionary monetary
policy should be continued. The majority of FOMC members are likely to realise that (a) the
dollar strength has a limited effect on inflation and economic growth in the US and (b) the
positive economic momentum this creates for the rest of the world, and for Europe and Japan in
particular, is important. In the end a favourable performance in these two regions is more
important for the US economy than a slightly weaker dollar today.
The FX market seems to differ. EUR-USD for example has lost approx. 3 cents of its 15 cent
move since May. However, the strong reaction of the USD is likely to be mainly due to
speculative investors holding considerable USD longs (chart 14). As a result even the smallest
risk to the fundamental reasons behind this position has a much more pronounced effect than
news supporting the positioning (chart 15).
However, this also means that the correction should not go too far. We expect that reasons for a
further appreciation of the dollar will emerge, in particular that the Fed will hike rates quite
quickly in 2015. The majority of the other G10 central banks on the other hand will probably be
interested in weakening their own currencies. At present there is little reason for the Fed to take
part in this depreciation race. Until that changes corrections in the dollar appreciation trend offer
good entry rather than exit points.
CHART 14: Is everyone USD long?
CHART 15: Too much dollar strength?
Share of EUR longs in directional EUR positions of non-commercial
IMM traders
ICE’s US dollar index (DXY), a relative good measure for the trade
weighted dollar, monthly candlestick chart
100%
90
75%
85
50%
80
25%
75
0%
2010
2011
2012
Source: CFTC, Commerzbank Research
10 October 2014
2013
2014
70
2010
2011
2012
2013
2014
Source: ICE, Commerzbank Research
research.commerzbank.com
13
Equity market preview:
Andreas Hürkamp
Tel. +49 69 136 45925
DAX at 9,000 a buying opportunity in our non-recession scenario
The DAX is suffering a volatile, painful October 2014, and the index has again fallen
towards the low of our expected 2014 trading range at 9,000. Germany's bleak 'hard' data
for August have intensified euro zone recession fears. However, we expect the DAX to
find a bottom in the coming trading days as (1) sentiment has moved from 'very
optimistic' to 'very concerned', (2) monetary indicators point to a mid-cycle slowdown
scenario and (3) DAX valuation metrics have fallen back to their 10-year averages.
Therefore we expect a DAX recovery in November and December following a negative
October.
TABLE 5: DAX suffers very weak start to Q4 2014
Earnings 2014e
Performance (%) since
Index
30/09
30/06
31/12
Index points
Growth (%)
current
current
31/12
P/E 2014e
31/12
current
31/12
DAX 30
8,995
-5.1
-8.5
-5.8
710.8
731.1
2.1
11.6
12.7
13.1
MDAX
15,377
-3.9
-8.6
-7.2
934.8
994.2
27.7
41.6
16.4
16.7
Euro Stoxx 50
3,053
-5.4
-5.4
-1.8
223.3
242.3
5.2
12.1
13.7
12.8
S&P 500
1,969
-0.2
0.4
6.5
117.2
119.3
7.9
9.9
16.8
15.5
Source: Commerzbank Corporates & Markets, I/B/E/S
Supported by bleak German data, the advance of ISIS, Ebola fears and worries over a weak
earnings season, bears were again able to depress the DAX to 9,000. In our DAX scenario the
level of 9,000 is near the low of our expected trading range. Several trends indicate that the DAX
should again find a bottom, and we expect a DAX recovery for November and December.
(1) Sentiment: Sentiment has strongly improved since the start of this year. The CBOE Total Put
Call Ratio, for example, has risen from a multi-year low of 0.7 ('very optimistic') back to 1.0 ('very
concerned'; see chart 16). The implied DAX volatility VDAX was near multi-year lows at 12 in
January - currently the VDAX is near 20.
(2) Economy: 2014 started with broad-based optimism that global growth should accelerate
thanks to the renaissance of the euro zone economy. Ten months later, however, investors are
discussing 'recession' scenarios. We do not believe in this bearish scenario as M1 money growth
in the euro zone has stabilised at 6% over the last few months. In our non-recession view we
also bank on the recent rise of Commerzbank's Early Bird indicator for the German economy
which forecasts a recovery in the ifo index in 2015 (chart 17).
(3) Valuation: Following Draghi's 'whatever it takes speech' the DAX P/E ratio (12-month
forward) rose from 9x in mid-2012 to 13x at the beginning of 2014. Since January the DAX P/E
ratio has now improved to 11.5x from 13.0x – the DAX P/E is back at its 10-year average. The
expected DAX dividend yield has risen to 3.3% from 3.0% since January – the yield is 170 bps
above the € BBB corporate bond yield. Based on this week’s prices and the assumption of
unchanged dividends for FY2014, 13 DAX companies offer a dividend yield of more than 3%.
CHART 16: Sentiment from optimism back to pessimism
CHART 17: Early Bird indicator not in recession territory
CBOE Total Put Call Ratio (15-day average)
DAX and Early Bird indicator since 2000
1.5
10000
1.2
pessimism
1.0
8000
0.5
1.0
6000
0.0
4000
0.8
optimism
0.6
Jan-12
14
Jul-12
Jan-13
Jul-13
Jan-14
-0.5
2000
-1.0
2000 2002 2004 2006 2008 2010 2012 2014
Jul-14
research.commerzbank.com
DAX
Early Bird
10 October 2014
Commodities market preview:
Barbara Lambrecht
Tel. +49 69 136 22295
Nosedive on oil market not over yet
A sharp decline in Chinese oil imports and a more sceptical outlook from the International
Energy Agency are likely to intensify demand concerns on the oil market and maintain the
pressure on the oil price. Base metal prices should barely move next week as market
participants should not be very surprised when the International Study Groups indicate
that the balance between supply and demand as much less favourable than it was only
last spring. Weak Chinese metal imports in September are probably also generally
expected.
TABLE 6: Trends in important commodities
Per cent change
Trend Commodity specific events
9 Oct.
1 week
1 month
1 year short-term
Brent (USD per barrel)
91.0
-2.6
-8.2
-16.6
Þ
Copper (USD per tonne)
6716
1.7
-1.8
-5.4
Ö
Gold (USD per troy ounce) 1230
1.2
-2.1
-5.8
Ö
CHN: oil imports (13), IEA (14)
CHN: Trade balance (13) ; Autumn meetings
International Study Groups
Source: Bloomberg, Commerzbank Research
In the last three and a half months, the price of a barrel of Brent has dropped by 20 %. At just
under 91 USD in mid week, it was at its lowest level since June 2012. Record-high speculative
short positions on the ICE reflect the bearish sentiment on the market. Nevertheless, the oil price
is likely to decline further as Chinese oil imports will probably show a sharp fall in September.
Moreover the International Energy Agency is likely to again reduce its forecast of global oil
demand. OPEC members are so far holding back with comments on future production levels.
Although a price level below 100 USD is already “painful” for many, they are likely to keep their
powder dry for the time being. However, should the price not rise soon, Saudi Arabia may
announce at the next OPEC meeting in late November that it is adjusting its production to
accommodate lower demand. This should then push the oil price up.
Base metal prices were able to escape the latest downward pull on the oil market (chart 18).
One reason was the recent positive equity market trend in the main base metals consumers: For
example, China’s CSI 300 has gained a good 15% since mid July. Furthermore, base metals do
not show as much oversupply as the oil market and the balance between supply and demand is
even worse than was expected in the spring. The International Study Groups should confirm this
view at their autumn meetings. In the spring, the International Copper Study Group expected a
supply surplus of 500,000 tonnes for the current year (chart 19). Supply fell short of demand by
500,000 tonnes in the first half of the year alone. The need for a correction in zinc market
forecasts is also pressing, and these are due a week on Monday. As the market already expects
such corrections, prices should hardly react.
CHART 18: Base metals are robust
CHART 19: Study groups were more optimistic in the
indexed 1 January 2014 = 100
spring
Supply minus demand in thousand tonnes
500
300
100
-100
-300
-500
Copper
2013
Source: Bloomberg, LME, Commerzbank Research
10 October 2014
Zinc
Lead
Nickel
2014 forecast
Source: ICSG; INSG; ILZSG, Commerzbank Research
research.commerzbank.com
15
Commerzbank forecasts
TABLE 7: Growth and inflation
Real GDP (%)
Inflation rate (%)
2013
2014
2015
2013
2014
2.2
2.2
2.9
1.5
1.7
1.8
2.0
2.3
2.5
0.9
2.1
2.0
Japan
1.5
1.0
1.3
0.4
2.8
1.5
Euro area
-0.4
0.7
0.8
1.4
0.6
1.0
- Germany
0.1
1.3
1.3
1.5
1.1
2.1
- France
0.4
0.3
0.5
0.9
0.6
0.7
- Italy
-1.7
-0.2
0.3
1.2
0.4
0.6
USA
Canada
2015
- Spain
-1.2
1.4
2.3
1.4
0.0
0.5
- Portugal
-1.4
1.0
1.5
0.3
-0.2
0.8
- Ireland
0.2
5.2
3.1
0.5
0.6
1.4
- Greece
-4.2
1.0
2.0
-0.9
-1.3
0.5
United Kingdom
1.7
3.0
2.6
2.6
1.6
1.9
Switzerland
2.0
1.7
1.8
-0.2
0.0
0.5
China
7.7
7.3
6.5
2.6
2.3
2.5
India
4.7
5.8
6.2
6.3
6.5
6.2
Brazil
2.5
0.3
0.9
6.2
6.3
6.5
Russia
1.3
0.3
0.9
6.8
7.3
6.5
World
2.9
3.1
3.4
• The ultra-expansionary policy of the Fed
is boosting the US economy. At the
same time, fiscal policy is at least no
longer a headwind. We therefore expect
US growth to markedly accelerate.
• Growth in China decelerates further, also
due to decreasing house prices.
• The recovery in the euro zone will only
continue at a slow pace. GDP growth will
remain lower than that of the USA.
• EMU has survived the sovereign debt
crisis, but is gradually evolving into an
“Italian-style monetary union”.
• Despite its current weakness, the
German economy looks set to continue
outperforming the rest of the euro area –
partly because ECB target rates are
much too low for Germany.
• High unemployment in most countries is
keeping inflation low for the time being.
In the long term, however, inflation is
likely to rise, as central banks have given
up some of their independence.
TABLE 8: Interest rates (end-of-quarter)
09.10.2014
Q4 14
Q1 15
Q2 15
Q3 15
Q4 15
Federal funds rate
0.25
0.25
0.25
0.50
1.00
1.50
3-months Libor
0.23
0.25
0.30
0.80
1.35
1.90
2 years*
0.45
0.70
0.90
1.20
1.60
2.00
5 years*
1.55
2.10
2.40
2.70
2.95
3.20
10 years*
2.31
2.70
2.90
3.10
3.30
3.50
Spread 10-2 years
187
200
200
190
170
150
Swap-Spread 10 years
15
10
10
10
15
15
USA
Euro area
Minimum bid rate
0.05
0.05
0.05
0.05
0.05
0.05
3-months Euribor
0.08
0.05
0.05
0.05
0.05
0.05
2 years*
-0.07
-0.10
-0.10
-0.10
-0.05
0.00
5 years*
0.15
0.25
0.20
0.25
0.35
0.40
10 years*
0.89
1.10
0.80
1.00
1.20
1.35
Spread 10-2 years
96
120
90
110
125
135
Swap-Spread 10 years
22
15
25
30
35
35
United Kingdom
Bank Rate
0.50
0.50
0.75
0.75
1.00
1.25
3-months Libor
0.56
0.80
0.90
1.05
1.25
1.40
2 years*
0.72
1.00
1.25
1.30
1.35
1.55
10 years*
2.25
2.60
2.85
3.05
3.20
3.35
• The Fed is set to gradually reduce its
QE3 programme and end it in October
2014. Interest rate hikes are on the cards
from 2015Q2, due to a continuously
decreasing US unemployment rate and
gradually rising inflation.
• Due to the deteriorating growth outlook
and increasing downside risks for
inflation we expect the ECB to announce
QE within the next 12 months.
• 10y Bund yields are likely to stabilise
around 1% later this year when the Fed
communication changes but mark new
record lows when the ECB announces
QE in 2015. Thereafter, yields should
rise gradually. The structurally low
interest rate environment remains intact.
• The focus on the Fed’s lift-off will put
upward pressure on US$ rates. A return
to 3% for 10y USTs is only on the cards
for 2015, though. The curve is in for a
textbook-style flattening via the short-end
in the coming quarters.
• Risk premiums of peripheral government
bonds are set to decline further.
TABLE 9: Exchange rates (end-of-quarter)
09.10.2014
Q4 14
Q1 15
Q2 15
Q3 15
Q4 15
EUR/USD
1.27
1.25
1.22
1.19
1.17
1.15
USD/JPY
108
110
113
116
118
120
EUR/CHF
1.21
1.21
1.21
1.21
1.21
1.21
EUR/GBP
0.79
0.77
0.76
0.75
0.74
0.73
EUR/SEK
9.13
9.10
9.00
8.95
8.90
8.90
EUR/NOK
8.18
8.05
7.80
7.70
7.70
7.65
EUR/PLN
4.17
4.15
4.10
4.08
4.06
4.05
EUR/HUF
306
312
310
309
308
306
EUR/CZK
27.47
27.50
27.30
27.00
27.00
26.90
AUD/USD
0.88
0.87
0.85
0.83
0.81
0.80
NZD/USD
0.79
0.77
0.75
0.73
0.71
0.70
USD/CAD
USD/CNY
1.11
1.13
1.15
1.16
1.17
1.18
6.13
6.10
6.05
6.00
5.95
5.95
• USD should further profit from the
expectations of Fed interest rate
normalization. Current USD rates have
not priced in the speed of rate hikes that
we expect.
• The high yielding G10 currencies should
particularly suffer from US rate hikes.
• EUR will remain under pressure due to
increasing likelihood of an ECB QE
program. ECB wants a weaker EUR and
is active in achieving this goal.
• CEE currencies are generally benefiting
from the dovish ECB backdrop, meaning
central banks have room to cut rates
further. HUF, PLN and RON should trade
range-bound, while EUR/CZK will float
above the 27.0 floor set by the CNB.
Source: Bloomberg. Commerzbank Economic Research; bold change on last week; * Treasuries, Bunds, Gilts, JGBs
16
research.commerzbank.com
10 October 2014
Research contacts (E-Mail: [email protected])
Chief Economist
Dr Jörg Krämer
+49 69 136 23650
Economic Research
Interest Rate & Credit Research FX Strategy
Dr Jörg Krämer (Head)
+49 69 136 23650
Christoph Rieger (Head)
+49 69 136 87664
Ulrich Leuchtmann (Head)
+49 69 136 23393
Eugen Weinberg (Head)
+49 69 136 43417
Dr Ralph Solveen (Deputy Head; Germany)
+49 69 136 22322
Alexander Aldinger
+49 69 136 89004
Lutz Karpowitz
+49 69 136 42152
Daniel Briesemann
+49 69 136 29158
Elisabeth Andreae (Scandinavia, Australia)
+49 69 136 24052
Rainer Guntermann
+49 69 136 87506
Peter Kinsella
+44 20 7475 3959
Carsten Fritsch
+49 69 136 21006
Dr Christoph Balz (USA, Fed)
+49 69 136 24889
Peggy Jäger
+49 69 136 87508
Thu-Lan Nguyen
+49 69 136 82878
Dr Michaela Kuhl
+49 69 136 29363
Peter Dixon (UK, BoE), London
+44 20 7475 4806
Markus Koch
+49 69 136 87685
Esther Reichelt
+49 69 136 41505
Barbara Lambrecht
+49 69 136 22295
Dr Michael Schubert (ECB)
+49 69 136 23700
Michael Leister
+49 69 136 21264
Dr Michael Schubert (Quant)
+49 69 136 23700
Equity Markets Strategy
Eckart Tuchtfeld (German economic policy)
+49 69 136 23888
David Schnautz
+1 212 895 1993
Cross Asset Strategy
Dr Marco Wagner (Germany, France, Italy)
+49 69 136 84335
Benjamin Schröder
+49 69 136 87622
Bernd Weidensteiner (USA, Fed)
+49 69 136 24527
Dr Patrick Kohlmann
(Head Non-Financials)
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