Closing Wrap - Monday 18.05
Headlines
  • Macron, Merkel Back EU Bond To Raise EUR500 Bln For Recovery Fund
  • IMF Chief Warns Full Global Economic Recovery Unlikely In 2021
  • US Health Sec. Azar Blames Deaths On WHO In Fiery Speech
  • On Negative Rates, Tenreyro Says BoE Has Not Ruled Out Any Policy
  • UK-US Trade Negotiations Set For Advanced Talks In June
  • Ford, GM And Fiat Chrysler Restart US Factories
  • Uber Cuts 3,000 More Jobs, Shuts 45 Offices In Coronavirus Crunch
  • Amazon's French Warehouses To Reopen With 30% Staff
  • Delta To Resume Flying Several Major Routes In June
  • Softbank In Talks To Sell T-Mobile Shares To Deutsche Telekom
Commentary
German Investor Outlook Poised To Edge Higher In May

German Investor optimism about the near future is expected to increase incrementally as Europe’s largest economy continues to loosen its pandemic lockdown, but opinions about the present environment will likely remain near their lowest level in a decade.

 

An economists’ poll forecasts the forward-looking ZEW’s economic sentiment index at 33.5,  a slight increase from the April’s 28.2 reading. Last month’s number was the highest since mid-2015 but followed March’s dismal -49.5 result, the worst showing since December 2011.

 

The current situation index for May is expected to rise slightly to -87.8 from last month’s -91.5, the lowest reading since May 2009.   

 

In early Monday trading, the Dax 30 index of German blue-chip stocks was still more than 20pct below the  post-lockdown high set in late April.

 

And the US Federal Reserve warned Friday that markets aren’t out of the woods yet. “Asset prices remain vulnerable to significant price declines should the pandemic take an unexpected course,” it said in a statement. (LiveSquawk – Continue Reading)

EU Lawmakers Voice Support For Equal Capital Treatment Of Euro Bonds

European Union lawmakers signalled their initial support on Monday for equal capital treatment of euro-denominated government bonds regardless of where they are issued in the bloc.

 

Non-euro zone EU states like the Czech Republic, Hungary, Poland and Bulgaria want to temporarily revive a rule that allows for the same capital treatment of euro-denominated sovereign debt issued by a single currency area member or by an EU state that has a different national currency.

 

With COVID-19 ushering in recessions across the EU, non-euro zone countries are worried they would face higher capital charges on issuing bonds in euros to cover potential risks from two currencies being involved. (Reuters – Continue Reading)

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