1. No category

Economic Research
Week in Focus
14 November 2014
Euro zone: What you need to know about QE
The ECB has its finger on the button. At the last ECB press conference Mario Draghi
practically announced broadly-based government bond purchases (QE), should the ECB
balance sheet not increase as hoped, or inflation expectations fall again. Our assessment
suggests that both these conditions are likely to be fulfilled in the early months of next year.
The ECB is therefore likely to decide at one of the first three meetings of 2015 to purchase
government bonds (QE) and it will probably allocate the purchases according to the ECB
capital key across member states.
Page 2
The Week in Focus in 100 seconds
Please follow this link for a video summary.
Without QE, the ECB can barely pump up its balance sheet by 1 trillion Euros
Estimated volumes of ECB measures in the next 2 years, all figures in billion Euro, figures marked
with * are known
1500
1250
1000
Compensation for
maturing assets (72)
Compensation for
repayment of
LTROs (300)*
Autonomous factors
(25)
Gap (740)
750
500
Targeted net increase
of ECB‘s balance
sheet (1000)
Purchases of
ABS (150) and
Covered bonds (80)
TLTROs in
2015/2016 (205)
2nd TLTRO (130)
250
1st TLTRO (net 42)*
0
ECB's gross target
Commerzbank expectations
Source: ECB, Commerzbank Research
Product Idea: € 5y Knock-in Swap. Compared with fixed-rate hedges, variable-rate
funding is currently cheap. We therefore recommend scaling into a 5y Knock-in Swap as a
hedge against higher rates, in the long term. This strategy requires no upfront premium.
Page 5
Outlook for the week of 17 November to 21 November 2014
Economic data: Euro zone leading indicators may well show some positive signals next
week, with a pickup in the German ZEW index and euro zone manufacturing PMI.
Page 7
Bond market: While investors’ discussions about ECB government bond purchases are
now focusing more on “when” and “how“ rather than “whether”, the downside potential for
yields appears somewhat limited. Consequently, the range trading should continue for
Bunds next week although peripheral bonds will likely remain under pressure.
Page 11
FX market: Domestic economic issues have lost much of their influence on EUR exchange
rates with the result that EUR-USD volatilities could continue falling.
Page 12
Equity market: Volatility should remain relatively high on the German equity market in 2015
and individual stock selection should therefore grow in importance. In selecting positions,
investors should consider earnings momentum and the already high valuations of some
DAX and MDAX companies.
Page 13
Commodity market: A week ahead of the OPEC meeting, volatility on the oil market looks
set to increase. Yet the price is unlikely to drop much lower than USD80 per barrel. No
additional impetus is likely in the base metals markets whilst silver could go lower, driven by
the trend in gold prices.
Page 14
Chief economist
Dr Jörg Krämer
+49 69 136 23650
joerg.kraemer@commerzbank.com
For important disclosure information please see page 17.
research.commerzbank.com / Bloomberg: CBKR / Research APP available
Editor:
Peter Dixon
+44 20 7475 4806
peter.dixon@commerzbank.com
Economic Research | Week in Focus
Euro zone: What you need to know about QE
Dr Michael Schubert
Tel. +49 69 136 23700
The ECB has its finger on the button. At the last ECB press conference Mario Draghi
surprisingly announced more measures to come, should the ECB balance sheet not
increase as hoped, or inflation expectations fall again. Our assessment suggests that
both these conditions are likely to be fulfilled in the early months of next year. The ECB is
therefore likely to decide at one of the first three meetings of 2015 to purchase
government bonds (QE) and it will probably allocate the purchases according to the ECB
capital key across member states. We expect corporate bond purchases to be more of an
add-on than an intermediate step.
No QE in December
Although Draghi’s surprisingly clear words fuelled fresh speculation of QE, such a move is
unlikely to be announced at the next meeting on 4 December. This is primarily due to the fact
that the volume of the second targeted long-term tender (TLTRO) will only become clear a week
after the meeting and without this information it is difficult to make even a provisional judgement
of whether the central bank’s balance sheet can be expanded by about a trillion euros, as the
ECB desires, on the basis of the measures announced so far.
Another reason to expect a wait-and-see stance at the December meeting are Draghi’s words
that it is “premature” to discuss specific measures in the Governing Council. At the last meeting,
the Council predominantly discussed the ABS programme that had just been agreed. And the
downward revisions to ECB projections that now look likely for December are unlikely to change
anything; according to Draghi, at its November meeting the Governing Council shared the view
of the recently-released consensus forecasts for growth and inflation which saw downward
revisions to the outlook for growth and inflation. Consequently, the new forecasts will not contain
any new information for members of the Governing Council.
Balance sheet target is unlikely to be reached …
That said the situation at the beginning of the year will presumably change rapidly enough to
prompt the ECB to decide on QE early in the coming year. We expect this to be announced at
one of the first three meetings in January, March or April. 1
It should then be clear that the central bank balance sheet is increasing at a much slower pace
than the ECB had anticipated (Chart 1). In quantifying ECB expectations in the chart, we have
assumed that the ECB expects total demand for the TLTROs of one trillion euros, i.e. the
maximum amount that Draghi cited at the press conference in July. For the ABS/Covered Bond
programmes, we have assumed a total of 500 billion euros. According to news agencies, this is
the sum being discussed at the ECB. Many ECB representatives see these targets as too
ambitious, but even if they are fulfilled the balance sheet target would not remotely be close to
being achieved, not least because the two 3-year tenders will be paid back in the meantime.
CHART 1: ECB balance sheet target is unlikely to be achieved
Balance sheet total of Eurosystem in billion euros and forecasts
3300
ECB target
3100
2900
2700
2500
2300
2100
1900
1700
1500
Jan-12 Jul-12 Jan-13 Jul-13 Jan-14 Jul-14 Jan-15 Jul-15 Jan-16 Jul-16 Jan-17 Jul-17
ECB balance sheet
Commerzbank forecast
ECB expectation
Source: ECB, Commerzbank Research
1
2
From 2015 onwards, the Council will decide on monetary policy only every six weeks.
14 November 2014
Economic Research | Week in Focus
In any event, the balance sheet is expected to increase at a much slower pace. Against the
backdrop of a continued weak economy, and hence very sluggish demand for credit, the
outstanding TLTROs are likely to see demand of only 350 billion euros (130 billion euros at the
following TLTRO in December). 2 In the case of covered bonds, we expect a buying volume of 80
billion euros whilst the ABS total is expected to be around 150 billion euros. 3
Based on these assumptions, the balance sheet will increase in the next two years by only about
200 billion euros, which is well short of the ECB target. Consequently, by next spring the balance
sheet is likely to be some 100 to 150 billion euros lower than the ECB’s target path; indeed, it
could even drop below its present level for a while. Over this period it should therefore become
clear to the ECB that it will not achieve its target with the existing measures. And at the last
press conference ECB president Draghi announced further measures in this eventuality.
… and inflation expectations could fall again
The fact that inflation expectations are likely to fall again is another argument in support of
further measures. We recently showed in a model analysis 4 that long-term market-based
inflation expectations are beginning to drift from their anchor. The measure clearly favoured by
the ECB – the expectation calculated from inflation swaps for inflation in five years for the
following five years (“5x5 expectation”) – has not only fallen sharply in recent weeks (Chart 2),
but is also now showing a much stronger reaction to disappointing economic data than in the
past. Investors increasingly appear to doubt that the ECB will be able to offset the effect of weak
economic growth on inflation in the medium and long term. And there will be considerable
potential for disappointing economic data in the months ahead. We believe the present
consensus expectation for growth in 2015 (1.2%) is still much too optimistic despite recent
downward revisions (Commerzbank: 0.8%). We should therefore see a new round of downward
corrections in the spring, which should put further pressure on long-term inflation expectations.
Surveys also indicate falling inflation expectations. The central bank primarily looks at the latest
results of the Survey of Professional Forecasters (SPF). According to the SPF, the likelihood of
the ECB missing its target in the long term has run in parallel with the (much more volatile)
market-based inflation expectation since the start of the debt crisis in 2010. It has therefore
become increasingly likely that the economists’ survey will begin to show similar doubts in the
months ahead. In the latest survey, published yesterday, participants assigned a probability of
around one third to the likelihood that the inflation rate will be no higher than 1.4% on a five year
horizon.
CHART 2: Euro zone: Continued downside risks for inflation
Five-year inflation linked forward swap rate in five years, likelihood according to SPF that the inflation rate
will be under 1.5% in five years (inverted scale)
2.9
5
2.7
10
15
2.5
20
2.3
25
2.1
30
1.9
1.7
2005
35
40
2006
2007
2008
2009
market expectation (lhs)
2010
2011
2012
2013
2014
Likelihood (inflation < 1.5%) (rhs)
Source: ECB, Bloomberg, Commerzbank Research
2
3
4
14 November 2014
“The €1,000bn TLTRO question”, Rates Radar, 10 July 2014.
“The Big Picture: Whatever it takes!”, Ahead of the Curve, 4 September 2014.
“Euro inflation expectations no longer firmly anchored – a model analysis”, Economic Insight, 5 November 2014.
3
Economic Research | Week in Focus
Legal problems argue in favour of a decision in April
Given the sluggish increase in the size of the balance sheet and the likelihood of further declines
in inflation expectations, a majority on the ECB Governing Council will likely favour broad-based
government bond purchases at one of the first three meetings next year. Legal problems
suggest that a decision is more likely to come in April; the European Court of Justice is soon
expected to pass its judgment on OMT, the government bond buying programme implemented in
2012. This judgement is unlikely to place any obstacles in the way of broad-based government
bond buying in principle. 5 According to latest media reports, a judgment by the ECJ is likely in
the first quarter 6 and the ECB may well hold off on QE until after the ruling in order to avoid any
legal problems.
Government bond purchases in accordance with ECB capital key
For legal reasons, the ECB is likely to allocate QE purchases among euro member states in
accordance with the ECB capital key. 7 The German Federal Supreme Court in its judgement on
OMT criticized the fact that OMT purchases were “selective”. QE allocation should therefore be
as “fair” and “equal” as possible.
A weighting by ECB capital key – i.e. according to members’ shares in population and economic
strength – not only appears plausible but has also been tested. Furthermore, it is stipulated in
the EU treaties that in its decisions on central bank capital or questions of gains and losses, the
votes of the ECB Governing Council should be weighted in accordance with this key.
If the capital key is used for QE, 26% of the buying volume would go to German government
bonds, 20% to French and 18% to Italian. For a targeted increase of the balance sheet to 3
trillion euros, which would likely require QE of about 750 billion euros, this would mean that the
ECB would acquire German securities worth around 120% of gross issues in 2015 (France 70%,
Italy 50%).
Probably not an intermediate step
There were some factors that did suggest for a while that the ECB Governing Council would
decide on a further intermediate step prior to QE. News agencies reported in October that the
ECB might decide in December to buy corporate bonds from 2015. The only plausible reason for
such an intermediate step would be continued strong resistance amongst Governing Council
members to broad-based government bond buying. Consequently, the purchase of corporate
bonds could be seen as a compromise first step. There had been media reports of substantial
opposition ahead of the last ECB Council meeting. However, the outcome of the last meeting
and comments at the press conference thereafter suggest that resistance to Draghi’s course is
not that great.
We have always been sceptical about the substance of such purchases. They would not help
small and mid-sized enterprises with financial difficulties, especially in the periphery. At the same
time, yield spreads of corporate bonds from euro countries have already aligned significantly
since mid-2012 so there have been no problems on this score for some time. Legally too,
corporate bond purchases might be problematic; due to their unequal distribution the ECB could
be accused of financing individual companies. Finally, the potential annual buying volume is
unlikely to exceed 40 to 50 billion euros so the ECB would not be able to achieve its balance
sheet target in this way. Indeed, why would the central bank take this path when it has had such
bad experiences with the ABS/covered bonds buying programme?
Consequently, we believe corporate bond purchases are likely only as an add-on to QE. Like in
the first purchase programme, the Securities Markets Programme, the ECB Governing Council
could decide to “conduct interventions in the euro area public and private debt securities
markets” and merely point out that an increase of the balance sheet to the levels of early 2012 is
expected.
5
6
7
4
“European Court of Justice: OMT before the court, so what?”, Economic Insight, 14 March 2014.
“Draghi and the naysayers”, Frankfurter Allgemeine Sonntagszeitung, 9 November 2014.
“ECB QE: Allocation probably by capital key”, Week in Focus, 10 October 2014.
14 November 2014
Economic Research | Week in Focus
Structured Hedge Products: € 5y Knock-in Swap
Markus Koch
Tel. +49 69 136 87685
Capitalise on cheap variable-rate funding without forgoing a favourable fixed-rate hedge
Compared with fixed-rate hedges, variable-rate funding is currently cheap. We therefore
recommend scaling into a 5y Knock-in Swap as a hedge against higher rates, long term.
This strategy requires no upfront premium.
While it is tempting to lock in historically low € 5y IRS/3m funding rates, the rate is still considerably
higher than current 3-month Euribor fixings. Besides the resulting negative carry, which should
remain in place until the ECB starts to tighten policy, the risk of a sharp increase in medium-term
funding rates appears low. On the contrary, with the ECB preparing additional quantitative
stimulus from Q1 2015, we believe the yield lows are still ahead of us. The upwardly sloped
Euribor future strip implies that the ECB starts unwinding its ultra-loose stance after 2016. While
this appears rather early in the current environment, uncertainty about longer-term inflation and
policy prospects looks set to rise when the ECB ventures into QE. When combining a medium
and a long-term horizon, is there any strategy to hedge against rising rates without incurring the
negative carry currently associated with fixed- versus variable-rate financing??
Borrowers who look for variable rates to stay low for a long time before facing increasing risks of
higher rates are recommended scaling into a € five-year Knock-in Swap. The swap presents
several advantages compared to a cap on interest payments or an unstructured swap. First of
all, no upfront premium is required to be paid. At the same time the borrower benefits from the
ultra-low Euribor rates (positive carry), without foregoing a favourable fixed rate hedge. If the
reference index – 3-months Euribor – rises significantly, the structure switches from a variable
into a fixed rate.
As long as the reference index at the quarterly fixings stays below the strike of 0.4%, the
borrower’s loan remains fully financed at a variable rate: only the lower 3-month Euribor rate is
paid. We expect that this will be the case for at least the next two years. However, if the
reference index is fixed above the strike of 0.4%, the fixed rate knocks in. Specifically, the
borrower pays a fixed rate of 1.8% through redemption. This way the borrower hedges funding
costs from that quarter onwards against the risk of higher rates later. Note that a temporary
overshooting of the barrier will not trigger the switch. Compared with a forward starting swap and
with the current uncertainty about future interest rates in mind, this fixed rate does not seem
unduly high. All else equal, the borrower breaks even with a 5y fixed rate with a switch after 3.75
years.
Finally, note that shifting the switch feature out to year two (three) would increase the knock-in
rate level by c. 45bp (100bp). In other words, accepting the low switch risk from inception
considerably reduces the knock-in (fixed) rate. In the best case, borrowers benefit from variablerate funding through maturity while a (highly unlikely) rate hike in in first quarter of 2015
represents the worst case.
€ 5y Knock-in Swap
Issuer:
Type:
Minimum Lot:
Maturity:
Client receives:
Client pays:
Reference index (RI):
Strike:
Knock-in rate:
Fixing:
Payment:
Basis:
14 November 2014
A- (average)
Swap
€ 1m
5 years
3m Euribor
3m Euribor or 1.8% fixed rate, as soon as the reference index has
been fixed above strike
3m Euribor
0.4%
1.8%
Quarterly, in arrears
Quarterly, in arrears
Act/360
5
Economic Research | Week in Focus
Major publications from 7 – 13 November 2014
Economic Insight: Renzi’s labour market reforms – no second
“Agenda 2010”
Renzi’s labour market reforms – reduced protection against dismissal, more flexible fixed-term
employment contracts, greater pressure on the unemployed – are reminiscent of the German
Agenda 2010 reforms. But unlike in Germany, Renzi’s reforms are unlikely to engender a
deceleration of wage growth or an improvement in competitiveness. The Italian social partners
have in the past proved extremely uncooperative and have fallen far short of exploiting their scope
for reform, as they have demonstrated time and again. For this reason Italy will continue lagging
behind the euro area in terms of economic growth. But nevertheless, the yield spreads of Italian
government bonds versus their German and Spanish peers should tend to decline – due to the
ECB’s easy monetary policy. more
Economic Insight: Greece – the political uncertainty is the problem
The sharp rise in risk premiums on Greek government bonds has dashed the Greek government’s
hopes of leaving the current programme without further support, as in the case of Ireland and
Portugal. In the negotiations over a new support programme, the bone of contention will
presumably not be so much the money but the conditions attached. Yet the real stumbling block is
likely to come in February. By that point, parliament has to elect a new president. If the election
fails, this will mean early new elections, which the unpredictable left-wing SYRIZA is likely to win
according to the present opinion polls. more
Economic Briefing: BoE Watch – Lower for longer
The BoE’s latest Inflation Report showed a slight downward revision to the GDP growth projections
but a much larger downward correction to CPI inflation forecasts. Indeed, over the whole of the
three year horizon, the inflation rate is projected to continue running below the 2% central target.
For the most part, the disinflationary forces acting on the UK are the result of global effects but the
MPC’s response is likely to be to keep domestic rates on hold for longer. more
FX Hotspot: NOK – The curse of the black gold
The Norwegian economy, and as a result the Norwegian krone, are paying a heavy price for the
steep fall in the oil price. Within a short space of time the krone depreciated by approx. 6.5%
against the euro. Due to the economic risks NOK weakness is likely to continue. Only once the
ECB begins implementing broad-based bond purchases is EUR-NOK likely to ease sustainably
again. more
EM Briefing: Turkey – Biggest beneficiary of the oil price drop
Turkey is the biggest beneficiary within the region from a decline in oil prices – its macroeconomic
outlook has the potential to improve significantly if commodity prices were to hold at current levels.
Core inflation and current account dynamics are already beginning to display positive trends; and
what is crucial, an emerging market’s capacity to finance a given external gap improves
dramatically against a backdrop of improving imbalances. Hence, a rise in US 10y yields would
have much less adverse impact on Turkish markets than it had in 2013. more
Credit Note: EU Banks – TLAC or how to bail in senior debt
The upcoming G20 summit in Brisbane this weekend will shed more light on how G20 leaders are
planning to tackle the “too big to fail issue”. Requesting the 30 largest banks globally (G-SIB) to
hold loss absorbing capacity of up to 25% of risk-weighted assets could have far reaching
consequences for banks’ balance sheet structures. The exact impact on each bank’s capital and
liability tranche is, however, far from clear as the proposed TLAC requirements leave room for
interpretation and are far from being finalised in detail. For EU banks we expect TLAC to be a
tricky, though ultimately manageable, issue as we see TLAC for EU banks as only a further
specification of existing bail-in rules under the BRRD. Ultimately, we expect senior debt to be TLAC
eligible which would significantly lower the hurdle to comply and reduce pressure to raise capital.
This is in line with our Overweight for financials and our Overweight for AT1/Tier 2. The necessary
restructuring of senior debt could add volatility to this class, but should overall benefit outstanding
“old-style” senior debt. more
6
14 November 2014
Economic Research | Week in Focus
Preview – The week of 17 to 21 November 2014
Time
Region Indicator
Period
Forecast
Survey
Last
Monday, 17 November 2014
0:50
13:30
14:15
JPN
USA
GDP
Empire State Index
Industrial production
Q3
Nov
Oct
qoq
sa
mom, sa
0.5
10.0
0.3
0.5
10.0
0.2
-1.8
6.2
1.0
mom
yoy
0.1
1.3
5.0
-0.1
55.0
0.1
1.2
-3.5
-0.1
55.0
0.0
1.2
-3.6
-0.1
54.0
Tuesday, 18 November 2014
9:30
GBR
CPI
Oct
10:00
13:30
15:00
GER
USA
ZEW Index
Producer prices, final demand
NAHB Index
Nov
Oct
Nov
mom, sa
sa
Wednesday, 19 November 2014
#
JPN
Statement on Monetary Policy by the BoJ
target
monetary
13:30 USA
Housing starts
Oct
Housing permits
Oct
GBR: Bank of England releases minutes of MPC meeting on Nov 5/6 (09:30)
US: Federal Reserve releases minutes from Oct 28/29 FOMC meeting (19:00 h)
trn yen
base
SAAR, k
SAAR, k
80
–
80
1020
1040
1025
1040
1017
1031
sa
sa
sa
sa
sa
sa
mom
yoy
k, sa
mom, sa
mom, sa
sa
SAAR, mn
49.0
48.5
51.5
54.5
51.0
52.5
0.1
3.6
270
-0.1
0.1
18.0
5.10
–
–
51.5
54.5
51.0
52.4
0.3
3.8
–
-0.1
0.2
18.3
5.15
48.5
48.3
51.4
54.4
50.6
52.3
-0.3
2.7
290
0.1
0.1
20.7
5.17
Thursday, 20 November 2014
8:00
FRA
•
8:30
GER
•
9:00
EUR
9:30
GBR
13:30
USA
15:00
PMI, manufacturing
PMI, services
PMI, manufacturing
PMI, services
PMI, manufacturing
PMI, services
Retail sales
Nov
Nov
Nov
Nov
Nov
Nov
Oct
Initial claims
CPI
CPI excl. food and energy
Philadelphia Fed Index
Existing home sales
Nov 15
Nov
Nov
Nov
Nov
Friday, 21 November 2014
No relevant data is due for release.
Source: Bloomberg. Commerzbank Economic Research; *Time GMT (subtract 5 hours for EST. add 1 hour for CET). # = 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
14 November 2014
7
Economic Research | Week in Focus
Dr Ralph Solveen
Tel. +49 69 136 22322
Economic data preview:
Euro zone: Sign of hope for the economy?
Positive signals for the euro zone economy will probably come from leading indicators
next week. Financial market participants, questioned about their economic expectations
for Germany in the ZEW, should be not quite so pessimistic about the future as of late,
and the manufacturing PMI should confirm a stabilisation relative to October. In the USA,
positive figures are expected from industry.
Comments on the September data from German manufacturing focused a little too much on the
monthly growth rates, which were below the consensus. It was therefore overlooked that after
having been revised, the August figures were not as bad as originally thought. That said, the
September figures do appear to have reduced the fear of a German economic collapse.
According to the Sentix survey, institutional investors are no longer quite so sceptical about
Germany’s economic outlook (Chart 3). As a similar group of people take part in the ZEW
survey, the responses here are likely to be similar. We therefore expect the ZEW to return to
positive territory (forecast 5.0 following a previous reading of -3.6; consensus: -3.5).
More uncertain is the prediction for the manufacturing purchasing managers’ index (PMI) in the
euro zone. This picked up again in October for the first time in six months, primarily because the
German index climbed by a substantial 1½ points after falling since the beginning of the year
(Chart 4). But is this the turnaround? Our Early Bird index, which has been pointing upwards
since the start of the year and led the German PMI by 7 and 11 months respectively at the last
two lower turning points, suggests at least that the turnaround is now not far away. That said, the
rise in the German index in October was favoured by a working day effect, which will be absent
in November. We therefore expect a practically unchanged index for Germany (forecast 51.5
after 51.4; consensus: 51.5). For the other euro zone countries, we anticipate slightly higher
PMIs on account of the better economic environment signalled by the Early Bird – in particular
the weaker euro should have an increasingly positive effect – causing us expect a slight rise for
the euro zone from 50.6 to 51.0 (consensus: 51.0).
USA: Industry faces tailwind, inflation headwind
Sentiment is bright in US industry. The ISM index in October returned to a high of 59 in October.
The “mining” sector (which includes oil and gas production) looks particularly good. In October,
almost 10% more hours were worked in this sector compared to October 2013. Consequently,
industrial production should also have picked up by 0.3% versus September (consensus 0.2%).
On the other hand, the price surge that the Fed is hoping for could take a while longer. Amid
falling petrol prices, consumer prices are likely to have fallen by 0.1% on the previous month
(consensus -0.1%).
CHART 3: Germany – analysts are not quite so depressed
CHART 4: Euro zone – Has the PMI turned the corner?
Economic expectations for Germany, Sentix: subcomponent for
institutional investors in Germany
Purchasing managers’ index for industry (PMI)
50
100
25
50
0
0
65
60
55
50
-25
-50
2009
-50
-100
2010
2011
2012
Sentix (lhs)
Source: Bloomberg, Commerzbank Research
8
2013
2014
ZEW (rhs)
45
40
2010
2011
Germany
2012
2013
2014
Euro area excluding Germany
Source: Global Insight, Commerzbank Research
14 November 2014
Economic Research | Week in Focus
Central Bank Watch (1)
Fed
An increasing number of FOMC members are speaking out
in favour of dropping the Fed's zero-interest-rate assurance
soon. This is essentially about the statement that key interest
rates should remain at their current level for "some time". It is
scarcely surprising that declared hawks such as Dallas Fed
president Fisher and Philadelphia Fed president Plosser
have said they are in favour of deleting this formulation from
the communiqué. More interesting is the stance taken by
Loretta Mester; the president of the Cleveland Fed is a
member of a Fed working group that looks at how to improve
central bank communication. Even if the Fed heavyweights,
including Janet Yellen, have not yet spoken out on this
subject, the likelihood is rising that the Fed will remove the
phrase "some time" from the statement at its December
meeting.
The continued improvement in the labour market gives the
Fed enough arguments to adjust its communication. The
unemployment rate fell by 1.4% in the twelve months to
October, an unusually sharp decline. The number of
vacancies was recently at its highest level since 2001 and
job growth has stabilised at above 200,000 per month
Bernd Weidensteiner
+49 69 136 24527
CHART 5: Expected interest rate for 3-month funds (USD))
2,0
1,5
1,0
0,5
0,0
current Dez 14
Futures
Mrz 15
13.11.14
Jun 15
Sep 15
06.11.14
Dez 15
Commerzbank
TABLE 1: Consensus forecasts Fed funds rate
Q4 14
Q2 15
Q4 15
Consensus
0.25
0.25
1.00
High
0.25
1.00
2.00
Low
0.25
0.25
0.25
Commerzbank
0.25
0.50
1.50
Source: Bloomberg, Commerzbank Research
ECB
ECB president Draghi repeated the central bank’s
commitment to “take further unconventional policy actions
should medium-term inflation expectations worsen or if the
measures already decided on prove to be insufficient”.
ECB Executive Board member Coeuré warned that “given
the latest indicators, we face the risk of a self-fulfilling loss of
momentum in euro area growth. The European Commission
just marked down its growth forecast. There is a need for
forceful and consistent action on all three fronts: monetary,
fiscal and structural policies. On the monetary front, the ECB
is playing its part …We have to try again and again. We have
instruments, if they do not work we will try other ones."
ECB Executive Board member Mersch who has always been
critical regarding government bond purchases said that
“there hasn’t been a decision to buy government bonds. It is
a theoretical option if the situation deteriorates.” "Should the
situation deteriorate further, then we would have to weigh all
possibilities based on their risk, how doable they are, the
limits of instruments and their efficiency," he argued.
According to ECB’s Weidmann, government bond purchases
would raise legal questions, set wrong incentives and may
not produce desired results. At the same time, he warned
that having inflation too low for too long was an “immense
challenge.”
CHART 6: Expected interest rate for 3-month funds (EUR
1,0
0,8
0,6
0,4
0,2
0,0
current Dez 14
Futures
Mrz 15
13.11.14
Jun 15
06.11.14
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
0.05
Low
0.05
0.05
0.05
Commerzbank
0.05
0.05
0.05
Source: Reuters, Bloomberg, Commerzbank Research
Dr Michael Schubert
+49 69 136 23700
14 November 2014
9
Economic Research | Week in Focus
Central Bank Watch (2)
Bank of England (BoE)
This week’s Inflation Report release was broadly in line with
our expectations and showed a sharp downward revision to
the near-term inflation outlook. The average inflation rate in
2015 is projected at 1.2%, and Governor Carney noted
during his press conference there was a good chance that he
would have to write a letter to the Chancellor early in the year
to explain why the inflation rate has dipped below the lower
end of the inflation target corridor (1-3%). This has further
raised the odds against a near-term rate increase with the
market probability of a 25 bps move by mid-2015 now below
40%, whilst a move in Q3 is no longer fully priced. Next week
sees the release of the November MPC minutes and
attention will focus on whether the two dissenters maintained
their push for a 25 bps rate hike. On the basis of the forecast
presented this week, their position looks untenable in view of
the fact that the BoE does not expect CPI inflation to return
to the central 2% target until late 2017. That said, Martin
Weale has pointed out that he is more concerned by a buildup of wage pressure and he can point out that real wage
inflation (ex. bonuses) is now running at its highest rate since
spring 2008. It is by no means certain that Mr Weale is yet
for turning.
CHART 7: Expected interest rate for 3-month funds (GBP)
2,0
1,5
1,0
0,5
0,0
current
Dez 14 Mrz 15
Futures
13.11.14
Jun 15
06.11.14
Sep 15
Dez 15
Commerzbank
Peter Dixon
+44 20 7475 4806
BoJ (Japan)
The BoJ meeting next Wednesday is likely to be a non-event.
After all, it was only at its last meeting that the BoJ increased
its targeted widening of the monetary base to ¥80trn per
year. As a result of this policy, the Japanese central bank will
become an even more dominant player on the Japanese
government bond market. At present, the BoJ holds around
22% of the Japanese central government’s outstanding debt.
This share will rise to 31% by end-2015 and to around 38% a
year later. Back in 2011, this ratio stood at less than 10%. So
far, however, the “quantitative and qualitative easing” has
failed to show the effect the BoJ had hoped for. The core rate
of inflation adjusted for the VAT impact recently stood at just
over 1%.
By accelerating its government bond purchases, the central
bank has at least put the yen under pressure. The pricedriving effect of this depreciation could help the BoJ in
meeting its inflation target. However, the risk is that such a
policy, whose effects unfold mainly through the exchange
rate channel, will trigger international protest. This has been
avoided so far. In fact, the Japanese have even ensured their
partners' consent in that fighting deflation has priority.
However, silent acceptance of such devaluation will only
remain in place as long as it does not turn out be too big.
CHART 8: Expected interest rate for 3-month funds (JPY)
1,0
0,8
0,6
0,4
0,2
0,0
current
Dez 14 Mrz 15
Futures
13.11.14
Jun 15
06.11.14
Sep 15
Dez 15
Commerzbank
Source: Bloomberg, Commerzbank Research
Bernd Weidensteiner
+49 69 136 24527
10
14 November 2014
Economic Research | Week in Focus
Michael Leister
Tel. +49 69 136 21264
Bond market preview:
Looking for fresh impetus
European bond markets are currently looking for fresh impetus. While investors’
discussions about government bond purchases by the ECB are now focusing more on
“when” and “how“ rather than “whether”, the downside potential for yields appears
somewhat limited given current levels and the likely ECB inaction at the December
meeting. Consequently, range trading should continue for Bunds next week while the
bonds of periphery countries will likely remain under pressure for now.
TABLE 3: Weekly outlook for yields and curves
Yields (10-year)
Curve (2 – 10-year)
Bunds
US Treasuries
sideways
moderately higher
neutral
flatter
Source: Commerzbank Research
Outlook for the Bund
Future,
17 – 21 November
Economy
→
Inflation
→
Monetary policy
↑
Trend
↑
Supply
→
Risk aversion
→
Bunds are currently moving in a relatively narrow trading range (Chart 9). Trading activities have
decreased noticeably, one reason being the public holidays in the US and various euro zone
countries. Overall, European bond markets appear to be looking for fresh impetus though. After
Draghi’s dovish surprise at the last ECB meeting, discussions about government bond
purchases (QE) by the ECB are now focusing more on the question of “when” and “how“ they
will happen rather than “whether”.
Yesterday’s ECB Survey of Professional Forecasters (SPF) has provided further arguments for
QE. Inflation expectations on a five-year horizon have fallen significantly compared to the
previous quarter and are now in line with the corresponding market-based measures (Chart 10).
In contrast to the latter, the SPF is not distorted by risk and liquidity premiums, nor by temporary
technical factors. This confirms our view that the fall in the market-based measures over the past
months is primarily due to falling inflation expectations and not – like the ECB states – to greater
uncertainty about the inflation outlook. Investors increasingly doubt that the ECB will achieve its
inflation target in the medium to long term.
This in itself gives Bund yields tailwind. Even so, we expect the recent sideways movement to
continue for now; the market does not expect ECB president Draghi to give any concrete
indications of imminent government bond purchases at the December meeting and the pending
economic data are unlikely to deliver a sufficiently strong new impetus either. The periphery
countries should remain under pressure irrespective of growing QE speculation, especially as
political risks are increasingly moving to the fore.
CHART 9: Interest-rate markets looking for new impetus
CHART 10: Inflation creditability of ECB is crumbling
Bund Future contract
€5y5y inflation rate derived from inflation swaps (5x5), in % and 5y.
inflation expectations of ECB expert survey (SPF), in %
151.8
2,9
2,10
151.6
2,7
2,05
151.4
2,5
1,95
151.2
2,3
1,90
151.0
2,1
150.8
1,85
1,9
150.6
150.4
05.11.
2,00
1,80
1,7
2005
06.11.
07.11.
10.11.
Source: Bloomberg, Commerzbank Research
14 November 2014
11.11
12.11.
13.11.
1,75
2008
5x5 Inflation Swap (LHS)
2011
2014
SPF 5y inflation expect. (RH
Source: Bloomberg, ECB, Commerzbank Research
11
Economic Research | Week in Focus
Ulrich Leuchtmann
Tel. +49 69 136 23393
FX market preview:
When all is said and done
Since ECB President Mario Draghi de facto proclaimed a target for the ECB’s balance
sheet volume, domestic euro area issues have lost much of their influence on EUR
exchange rates. This means that EUR-USD volatilities could continue falling.
TABLE 4: Expected trading ranges for next week
EUR-USD
EUR-JPY
USD-JPY
Range
Trend
1.2250-1.2600
141.50-147.50
113.50-119.50
Î
Ò
Ò
EUR-GBP
GBP-USD
EUR-CHF
Range
Trend
0.7850-0.8050
1.5450-1.5900
1.2000-1.2080
Î
Î
Î
Source: Commerzbank Research
Will the ECB buy government bonds on a broad base or not? Whilst this remains an exciting
question for the bond market, it has become much less relevant for the FX market. By proclaiming a de-facto balance sheet target, ECB President Mario Draghi has already announced
the additional liquidity the ECB wants to provide (around 1 trillion euros). The allocation of this
volume on ECB measures already underway (TLTRO, ABSPP, CBPP3) and a potential QE
programme is of minor importance to the FX market. This is because liquidity measures mainly
affect exchange rates via the liability side of the central bank’s balance sheet. But this also
means that EUR exchange rates are now hardly driven by changes in the QE probability. Only
declining inflation expectations (which could trigger an increase in the €1 trillion target) would put
additional pressure on the euro. But this appears unlikely at present (Chart 11).
On the USD side, the minutes of the October FOMC meeting, which will be released next
Wednesday, should be interesting. After all, the corresponding FOMC statement was interpreted
as surprisingly hawkish. But this also means that markets could once again ignore the hawkish
passages in the minutes as already priced in and instead fling themselves at some dovish
remark or other that will inevitably crop up given that there is a small but vocal group of doves on
the FOMC. In combination with a still sizeable amount of USD long positions, this could be at
least sufficient to interrupt the medium-term downtrend in EUR-USD (Chart 12). However, a
larger correction upwards is unlikely. The fundamental arguments in favour of existing EUR-USD
short positions are still valid.
All in all, this probably means that – similar to last summer – the EUR-USD market could lapse
into fatigue. Short EUR-USD volatilities therefore have new downside potential in the near future
– but only until the market starts to price in more aggressive Fed rate hikes than currently.
CHART 11: Pressure on inflation expectations is easing
CHART 12: Threat of fatigue in EUR-USD?
5Y×5Y inflation expectations in euro area (ex tobacco), from inflation
swaps
Implied EUR-USD volatility, 1 month, ATM; percent annualised
2.3%
10
2.2%
9
2.1%
8
2.0%
7
1.9%
6
1.8%
5
1.7%
Jan 14
Mar 14
May 14
Source: Commerzbank Research
12
Jul 14
Sep 14
Nov 14
4
Jan 13
Jul 13
Jan 14
Jul 14
Source: Bloomberg
14 November 2014
Economic Research | Week in Focus
Markus Wallner
Tel. +49 69 136 21747
Equity Market Preview:
Investment themes 2015
Volatility should remain relatively high on the German equity market in 2015. The
selection of individual stocks should therefore grow in importance. Key issues are likely
to be the upcoming turnaround in the US monetary policy, further depreciation of the euro
(especially versus the US dollar) and ongoing restructuring. In selecting positions,
investors should also consider earnings momentum and the already high valuations of
some DAX and MDAX companies. These themes will be specified in our Equity Outlook
2015, which will be published next week.
TABLE 5: Equity markets are still volatile
Earnings 2014e
Performance (%) since
31/12
Index points
Growth (%)
current
current
31/12
P/E 2014e
Index
31/10
30/09
31/12
current
31/12
DAX 30
9,211
-1.2
-2.8
-3.6
706.0
731.1
1.6
11.6
13.0
13.1
MDAX
16,157
0.1
1.0
-2.5
926.3
994.2
26.7
41.6
17.4
16.7
Euro Stoxx 50
3,047
-2.1
-5.5
-2.0
221.7
242.3
4.5
12.1
13.7
12.8
S&P 500
2,038
1.0
3.3
10.3
116.8
119.3
7.8
9.9
17.4
15.5
Source: Commerzbank Corporates & Markets, I/B/E/S
Fed turnaround: The looming interest rate turnaround in the coming year should mean
additional volatility on the German equity market. Stocks of highly indebted companies should
suffer especially. One example is ThyssenKrupp, whose net debt is almost five times as high as
operating earnings before interest, taxes and amortization. In the financial sector, the rise in
interest rates will mostly weigh on the real estate sector, while the banking and insurance
sectors have actually mainly profited from this in the past.
German companies with a high percentage of sales in the emerging markets such as Brazil,
Indonesia and Russia are likely to be indirectly affected by the Fed turnaround; the currencies of
these countries should come again under pressure from the change in course of US monetary
policy.
Weaker euro: While the earnings of German companies generally suffered over the year from
euro appreciation earlier in the year, they should soon gain a tailwind from this front. Discussions
on further monetary easing in the euro zone, coupled with the expected turnaround on interest
rates by the US central bank, have caused the euro to lose 9% against the USD in past weeks.
This trend is set to continue in the coming year and companies with positive earnings sensitivity
to a rising US dollar should of course profit most. This is the case for K+S or BMW, for example.
Restructuring: Given the likely continued weak sales growth momentum, or even declining
sales, German companies will undertake further restructuring to maintain earnings margins or
even increase them. This applies especially to firms with high fixed costs whose earnings react
strongly to sales fluctuations. In the case of Hochtief, for example, 1% lower fixed costs would lift
operating earnings by around 7%.
Earnings momentum and valuation: Despite the consolidation of the German equity market in
October, the valuations of some DAX and MDAX stocks are still quite high. Investors should
therefore continue to focus on the shares of companies whose earnings momentum is stronger
than that of the general market and whose valuations based on the P/B ratio are lower or
relatively close to the long-term average. This holds true of HeidelbergCement and K+S, for
example.
14 November 2014
13
Economic Research | Week in Focus
Barbara Lambrecht
Tel. +49 69 136 22295
Commodities market preview:
Increasing nervousness ahead of the OPEC meeting
One week ahead of the OPEC meeting, volatility on the oil market looks set to increase.
After all, the usual statements from OPEC delegates in the run-up to the meeting should
trigger strong price fluctuations. Yet the price is unlikely to drop much lower than USD80
per barrel. The Study Groups’ and World Bureau of Metal Statistics’ supply-demand
balances do not promise any further impetus for base metals. Neither is the Silver
Institute’s report likely to come up with a surprise on the silver market. Instead, silver
might cheapen once more, driven by gold.
TABLE 6: Tendencies in important commodities
Per cent change
13 Nov
1 week
1 month
Tendency Commodity specific events
1 year short-term
Brent (USD a barrel)
79.4
-4.2
-10.7
-25.9
Þ
Copper (USD a ton)
6718
0.9
0.1
-3.8
Ö
Gold (USD a troy ounce)
1162
1.8
-6.0
-9.4
Ö
Silver (USD a troy ounce)
15.7
2.1
-10.0
-23.7
Ö
ILSZG (17), WBMS (19)
Silver Market Interim Report (18)
Source: Bloomberg, Commerzbank Research
Brent oil continues to move lower and is currently trading at just under USD80 – a level last seen
four years ago (Chart 13). One week before the eagerly awaited OPEC meeting, the downtrend
on the oil market is likely to start losing momentum though. After all, there is a (small) chance
that the oil cartel will vote in favour of reducing supply. Speculative investors look set to turn
more cautious as a result. After all, Saudi Arabian Oil Minister Al-Naimi this week denied that his
country was engaged in any price war, saying that the Saudis were interested in stable oil prices.
This leaves room for interpretation. The usual statements from OPEC delegates in the run-up to
the meeting should trigger price fluctuations all the more.
Silver has lost almost 20% since the start of the year. In recent months, in particular, the price
pressure was much stronger than on the gold market, although both prices traded at 4½-year
lows. Further to the downward pull from the gold market, the silver price is being hit by two
additional factors: For one, there is the weakening Chinese economy since industrial demand is
much more significant for silver than for gold. For another, supply appears to be rising strongly.
More than half of silver supply is created in the production of base metals which are still in great
demand at present (Chart 14). In recent years, the supply overhang has been absorbed by rising
investment demand. Yet stagnating holdings of silver ETFs argue for receding buying interest
from investors. The report of the Silver Institute, due to be released on Tuesday, should reflect
these market trends and thus leave the price virtually unaffected. Near-term, price trends on the
gold market should therefore continue to lead silver prices as the price correlation between both
precious metals remains high. Long-term, however, silver might benefit from strengthening
industrial demand.
CHART 13: Oil price continues heading further south
CHART 14: Oversupply on the silver market
USD per barrel
In million ounces
0.90
900
800
700
600
500
400
300
200
100
0
0.85
0.80
0.75
0.70
Jan-10
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Jan-11
Jan-12
Jan-13
Source: Bloomberg, Commerzbank Research
14
Jan-14
Industrial Fabrication
Mine Production
Source: Silver Institute, Commerzbank Research
14 November 2014
Economic Research | Week in Focus
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)
13.11.2014
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*
0.52
0.70
0.90
1.20
1.60
2.00
5 years*
1.63
2.10
2.40
2.70
2.95
3.20
10 years*
2.35
2.70
2.90
3.10
3.30
3.50
Spread 10-2 years
183
200
200
190
170
150
Swap-Spread 10 years
13
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*
-0.05
-0.10
-0.10
-0.10
-0.05
0.00
5 years*
0.10
0.25
0.20
0.25
0.35
0.40
10 years*
0.79
1.10
0.80
1.00
1.20
1.35
Spread 10-2 years
84
120
90
110
125
135
Swap-Spread 10 years
21
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*
0.60
1.00
1.25
1.30
1.35
1.55
10 years*
2.17
2.60
2.85
3.05
3.20
3.35
• The Fed has ended its QE3 programme.
Interest rate hikes are on the cards from
2015Q2, due to a continuously decreasing US
unemployment rate and gradually rising
inflation.
• Since the Eurosystem balance sheet will
probably not expand as expected by the
central bank, and as inflation expectations are
likely to fall further, we expect the ECB to
announce broad-based government bond
purchases during the first half of 2015.
• 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)
13.11.2014
Q4 14
Q1 15
Q2 15
Q3 15
Q4 15
EUR/USD
1.25
1.25
1.22
1.19
1.17
1.15
USD/JPY
116
117
117
120
122
125
EUR/CHF
1.20
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
9.25
9.10
9.00
8.95
8.90
8.90
EUR/NOK
8.47
8.80
8.60
8.55
8.50
8.40
EUR/PLN
4.23
4.15
4.10
4.08
4.06
4.05
EUR/HUF
306
312
310
309
308
306
EUR/CZK
27.65
27.50
27.30
27.00
27.00
26.90
AUD/USD
0.87
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
1.13
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.
• The discussion about an ECB QE programme
will not put much pressure onto the euro for
the time being because the overall volume of
ECB liquidity measures is already known.
• 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
14 November 2014
15
Economic Research | Week in Focus
Research contacts (E-Mail: firstname.surname@commerzbank.com)
Chief Economist
Dr Jörg Krämer
+49 69 136 23650
Economic Research
Interest Rate & Credit Research FX Strategy
Commodity Research
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
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Economic Research | Week in Focus
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