In this short video we explain what has happened with earnings in the first quarter. Continue reading Earnings Season. First Quarter 2018 Shows Europe Weaker
Category Archives: Europe
The Crowded Trade. Is Europe Slowing Down?
Consensus remains euphorically optimistic about the Eurozone.
However, the first data of 2018 are worrisome. While consensus expects a strong 2018 for Europe, the advanced data begins to question the optimistic expectations. Continue reading The Crowded Trade. Is Europe Slowing Down?
A Strong EUR-USD Is A Headache for the ECB
At the close of this article, the euro was at its highest level relative to the USD of the last three years, a movement that surprises when the European Central Bank is carrying out the most aggressive monetary expansion in the world after the Bank of Japan. Continue reading A Strong EUR-USD Is A Headache for the ECB
Exporters in Europe face a headwind if euro strength holds
Exporters in Europe face a headwind if euro strength holds from CNBC.
In this short video at CNBC we discuss the risks of a strengthening EUR for European estimates:
- Eurostoxx earnings’ growth estimates are at risk. A full year of EUR/USD above 1.20 means earnings growth could go to zero as most exporters in the index are mid-to-low value-added that fail to maintain margins if the European currency strengthens.
- ECB’s inflation expectations are under threat. A full year of EUR/USD above 1.20 means both core and headline inflation could fall below 0.8% and 1.5% respectively.
- ECB will likely have to postpone normalization of monetary policy while risk of fueling bubbles is mounting.
Daniel Lacalle is a PhD Economist, author of Escape from the Central Bank Trap and Life In The Financial Markets. He is Chief Economist at Tressis