Previous post Next post

Is Europe turning Japanese?

European investment opportunities remain, despite financial repression in the region.

The European Central Bank (ECB) surprised market watchers with its dovish turn in January, wiping out any prospect of an interest-rate rise this year and revising its growth projections for the euro area downward for 2019. With Europeans set to live with interest rates at zero (or negative) for longer, many are wondering if Europe now faces “Japanisation”, meaning that it is stuck in a low-growth and low-rate environment indefinitely, presenting particular challenges for European investors.

Given the current environment and the already low yield level reached by both European sovereign and credit markets, generating returns out of safe assets will be challenging for investors. We can expect negative returns for European investment grade and German sovereign bonds to persist over the next five years. Hence, European investors need to take a different path to generate some income out of their savings.

German Bunds Yield, curve

(see more posts on German Bund yield, )
German Bunds Yield, curve

- Click to enlarge

Read full report here

Full story here
Previous post See more for 2) Swiss and European Macro Next post
Tags: ,,,,,

Permanent link to this article: https://snbchf.com/2019/05/tavazzi-europe-turning-japanese/

Leave a Reply

Your email address will not be published.

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>

This site uses Akismet to reduce spam. Learn how your comment data is processed.