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    Daiwa’s research coverage of the euro area and UK economies.

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    Daiwa’s coverage of the US economy from our colleagues in New York

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2023

2022

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  • Euro Wrap-up

    Euro Wrap-up

    30 May 2023 303 KB PDF
    • Bunds made big gains as Spanish inflation surprised on the downside, inflation expectations in the region softened, bank lending continued to slow, and the Commission’s business sentiment indices deteriorated.
    • Gilts also made gains despite a rise to a series high in May in the BRC’s shop price survey measure of inflation. 
  • European Banks - Credit Update

    European Banks - Credit Update

    30 May 2023 584 KB PDF
    • Profitability of Spanish banks increases, despite the introduction of the temporary banking tax. Strong deposit funding base only faced limited outflows. Slowing mortgage market presents headwind
    • French agencies return to SSA primaries following sovereign downgrade, while banks continue to issue across payment ranks. Continued Tier 2 issuance could pave way for reopening of AT1 market
    • Secondary market spreads generally continue to tighten in EUR, with USD spreads also mostly tighter. Continued tightening in sub-debt segments signals improving market confidence
  • Euro Wrap-up

    Euro Wrap-up

    26 May 2023 410 KB PDF
    • Bunds followed USTs slightly lower at the long end of the curve while the latest consumer confidence surveys from the large euro area member states were mixed but negotiated wage growth in the region picked up to a series high.
    • Following recent marked losses, Gilts firmed at the end of the week despite a pickup in UK retail sales.
  • Euro Wrap-up

    Euro Wrap-up

    24 May 2023 309 KB PDF
    • Shorter-dated Bunds made modest losses even as the German ifo indices were less upbeat than the PMIs, suggesting lacklustre growth momentum.
    • Gilts made substantial losses after UK inflation significantly exceeded all expectations despite easing to a 13-month low, and core inflation jumped to a new 31-year high, supporting the case for additional monetary policy tightening.
  • Euro Wrap-up

    Euro Wrap-up

    23 May 2023 262 KB PDF
    • Despite further evidence of softening activity and price pressures in manufacturing, Bunds were little chaged as the flash euro area PMIs suggested firm growth in services and persistent inflation in that sector.
    • As BoE Governor Bailey admitted mistakes in forecasting the extent and persistence of the rebound in price pressures, Gilts sold off as the flash UK PMIs also signalled solid growth and sticky inflation in services.
  • Euro wrap-up

    Euro wrap-up

    22 May 2023 238 KB PDF
    • Bunds followed USTs lower while euro area consumer confidence increased only minimally in May and euro area construction output dropped in March but rose over Q1 as a whole.
    • Gilts underperformed as a survey suggested that home-sellers’ asking prices had risen in May by the most in a year, albeit in line with the usual seasonal pattern, while Bloomberg cited an internal BoE paper suggesting that its QE-related Gilt portfolio might be halved over coming years.
  • European Banks - Credit Update

    European Banks - Credit Update

    22 May 2023 574 KB PDF
    • After a strong 1Q23 earnings season in Europe, bank fundamentals have proven to be sound but low deposit betas and high capital distribution plans could be headwinds going forward
    • A busy primary market for both SSAs and FIGs. Cross-currency swap moves benefitted European SSA issuing in USD, while FIGs revived sub-debt and Sterling markets
    • Secondary market spreads continue to tighten in EUR, while this development was less pronounced in USD. Stronger tightening in sub-debt segments implies rising market confidence
  • Euro Wrap-up

    Euro Wrap-up

    19 May 2023 293 KB PDF
    • While ECB President Lagarde stated that the ECB needs to have “sustainably high interest rates”, Bunds made gains at the long end of the curve as German producer price inflation fell to its lowest rate in more than two years.
    • Gilts largely made losses as UK consumer confidence rose to a fifteen-month high.