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)

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)