e2fda6f48f4beb7f2e9a16bde35b727c4d7cd8e0d73c422d49e7378ade652268;;[{"layout":"linklist","uid":23929,"publicationDate":"22 Nov 12:32","emaObject":{"protectedFileLink":"https:\/\/www.research.unicredit.eu\/DocsKey\/economics_docs_2020_178554.ashx?EXT=pdf&KEY=C814QI31EjqIm_1zIJDBJAq2DaQTse-ldzWaewShJ7s=&T=1","protectedFileLinkDe":"https:\/\/www.research.unicredit.eu\/DocsKey\/economics_docs_2020_178554.ashx?EXT=pdf&KEY=C814QI31EjqIm_1zIJDBJAq2DaQTse-ldzWaewShJ7s=&T=1","protectedFileLinkIt":"https:\/\/www.research.unicredit.eu\/DocsKey\/economics_docs_2020_178554.ashx?EXT=pdf&KEY=C814QI31EjqIm_1zIJDBJAq2DaQTse-ldzWaewShJ7s=&T=1"},"title":"Chief Economist\u00b4s Comment - Sunday Wrap","product":"Chief Economist's Comment","synopsis":"<p><ul class=\"ucrBullets\"><li> I\u2019ll start with a very brief summary of our report, so that we start on the same page for the \u201cnormality\u201d discussion, in case you haven\u2019t had a chance to read it yet.<\/p><\/li><\/ul><p><ul class=\"ucrBullets\"><li> I\u2019ll then discuss the issue of \u201creturning to normality\u201d and what it means for fiscal and monetary policies.<\/p><\/li><\/ul><p><ul class=\"ucrBullets\"><li> Finally, I\u2019ll discuss the risk of getting it wrong, particularly as it relates to European banks and their ability to intermediate capital on market conditions, and hence function as an effective transmission mechanism for monetary policy \u2013 which, in case you have forgotten after all these years, is also part of \u201cnormality\u201d in a markets based economy.<\/p><\/li><\/ul>","hash":"e2fda6f48f4beb7f2e9a16bde35b727c4d7cd8e0d73c422d49e7378ade652268","available":"0","settings":{"layout":"linklist","size":"default","showanalysts":"0","showcompanies":"0","showcountries":"0","showcurrencies":"0","synopsislength":"-1","synopsisexpand":"0","nodate":"0","nolinktitle":"0","notitle":"0","dateformat":"d M G:i","noproduct":"0","noflags":"0","shownav":"0","oldestedition":"","limit":"12"}},{"layout":"linklist","uid":23870,"publicationDate":"15 Nov 12:24","emaObject":{"protectedFileLink":"https:\/\/www.research.unicredit.eu\/DocsKey\/economics_docs_2020_178488.ashx?EXT=pdf&KEY=C814QI31EjqIm_1zIJDBJNz_HpRJyanXlC-LM3yRebs=&T=1","protectedFileLinkDe":"https:\/\/www.research.unicredit.eu\/DocsKey\/economics_docs_2020_178488.ashx?EXT=pdf&KEY=C814QI31EjqIm_1zIJDBJNz_HpRJyanXlC-LM3yRebs=&T=1","protectedFileLinkIt":"https:\/\/www.research.unicredit.eu\/DocsKey\/economics_docs_2020_178488.ashx?EXT=pdf&KEY=C814QI31EjqIm_1zIJDBJNz_HpRJyanXlC-LM3yRebs=&T=1"},"title":"Chief Economist\u00b4s Comment - Sunday Wrap","product":"Chief Economist's Comment","synopsis":"<ul class=\"ucrBullets\"><li><strong> The ECB\u2019s clear communication at \u201cvirtual Sintra\u201d: <\/strong> Great news for December and 2021, but I see a potential concern on the horizon. <\/li><\/ul><ul class=\"ucrBullets\"><li> As the inevitable end of the Trump presidency nears, I\u2019ll try to identify the large minority who voted for him. They may well follow him as he\u2019ll probably set out to remake the Republican party. <\/li><\/ul><ul class=\"ucrBullets\"><li><strong> The BioNTech-Pfizer announcement: <\/strong> My four take-aways.<\/li><\/ul>"},{"layout":"linklist","uid":23864,"publicationDate":"12 Nov 14:51","emaObject":{"protectedFileLink":"https:\/\/www.research.unicredit.eu\/DocsKey\/economics_docs_2020_178473.ashx?EXT=pdf&KEY=C814QI31EjqIm_1zIJDBJNz_HpRJyanXi5s4r-TySBU=&T=1","protectedFileLinkDe":"","protectedFileLinkIt":""},"title":"Chart of the Week - From vaccine breakthrough to herd immunity: A long road ahead","product":"Chart of the Week","synopsis":"<ul class=\"ucrBullets\"><li> Last Monday, Pfizer and its German partner, BioNTech, reported that their experimental coronavirus vaccine, which is now in a Phase 3 trial, was more than 90% effective in preventing COVID-19 \u2013 an efficacy that might be revised as more data become available, although we would not expect the new number to be significantly lower. This compares with influenza vaccines, whose efficacy is generally around 60-70%. US Food and Drug Administration (FDA) emergency approval requires an efficiency threshold of 50% for a vaccine. In the third week of November Pfizer will have collected two months of safety follow-up data, which is required for emergency use authorization (EUA) by the FDA. This allows for a December 2020 FDA review panel and potential EUA issuance before year-end. Based on current projections, the two firms expect to produce up to 50 million vaccine doses globally in 2020 and up to 1.3 billion doses in 2021. At the moment, there are ten other vaccines in large-scale Phase 3 efficacy tests, while new and existing medicines for the treatment of COVID-19 are being developed.<\/li><\/ul><ul class=\"ucrBullets\"><li> With the prospect of mass-deployment of COVID-19 vaccines now within reach, and applying a theoretical approach published in the journal The Lancet, our Chart of the Week tentatively shows how many people must be vaccinated in order to achieve herd immunity and block COVID-19 transmission. Immunization of a sufficient number of people will be key to relieving the pressure on health structures, allowing containment measures to be lifted and economies to be fully reopened. <\/li><\/ul><p class=\"ucrIndent\"><strong>In rough terms, herd immunity depends on two factors: <\/strong> the basic reproduction number (R0) and the efficacy of the vaccine. The former indicates the average number of secondary infections produced by a typical case of an infection within a population. This varies from disease to disease and from country to country. In the case of COVID-19, the range of estimates is from 2.0 to 3.0 \u2013 meaning that every infected person tends to transmit the virus to two or three other people. R0 is different from and higher than the effective reproduction number (Re) \u2013 that is affected by containment measures and by the number of people vaccinated. Vaccine efficacy, instead, is the percentage reduction of the disease in a vaccinated group of people compared to an unvaccinated group. The chart shows that for a vaccine with 90% efficacy, between 55% and 75% (so called herd immunity threshold) of the population needs to be vaccinated in order to break the chain of infection and structurally bring Re below 1.0 \u2013 when an infectious disease gradually dies out.1) The herd immunity threshold would be even higher for a vaccine with 70% efficacy \u2013 implying that, for R0 equal to 3.0, almost the entire population would need to be vaccinated. <\/p><ul class=\"ucrBullets\"><li> In the case of the Pfizer vaccine, and assuming that its 90% efficacy gets confirmed, our chart implies that around 175-240 million Americans and 245-335 million Europeans (EU minus UK) need to be vaccinated in order to achieve herd immunity. And every person getting the vaccine needs a second dose 21 days after the initial injection \u2013 with optimal immunity only developing after 7-10 days post the administration of the second shot. In order to have a very rough sense about how long it could take to deploy so many doses of vaccine, we take a look at the case of a typical influenza vaccine. According to the Centers for Disease Control and Prevention, this year about 200 million doses of influenza vaccine are going to be distributed in the US. Distribution started in mid-August and will end in mid-November, with an average of 15 million doses shipped weekly. As far as the Pfizer vaccine is concerned, and assuming an R0 of 3.0, a similar distribution process would take 32 weeks for the US and 44 weeks for the EU to reach herd immunity against COVID-19. In such a hypothetical scenario, this implies that if mass distribution of the COVID-19 vaccine picks up in February or March, herd immunity would not be achieved until the end of 2021 and so some containment measures would have to remain in place until then. <\/li><\/ul><ul class=\"ucrBullets\"><li> However, this estimate should be seen as a (very optimistic) temporal lower bound for a number of reasons. Compared to regular influenza vaccines, whose storage temperature is -2\u00b0\/-8\u00b0 Celsius, the most promising COVID-19 vaccines (not just the Pfizer one) require a cold supply chain that preserves the vaccine at around -70\u00b0\/-80\u00b0 Celsius. Thus, even if pharmaceutical firms are massively investing in the physical infrastructures necessary for the storage and shipping of the vaccine, logistical bottlenecks are likely to emerge and delay its distribution. Moreover, the above estimates are based on the assumption that immunity is permanent, but it is rather likely that the incoming vaccines will guarantee immunity for 12-18 months (or maybe less), thus requiring continuous vaccination campaigns. And mutation on the part of the virus could dampen vaccination success. Finally, unless governments manage to put in place good communication strategies on the individual and societal value of being vaccinated, there is a high risk that a relevant fraction of the population will resist vaccination. According to a recent PEW survey, 49% of Americans is against it. <\/li><\/ul><ul class=\"ucrBullets\"><li> For all of these reasons, restrictions, probably in soft forms such as wearing face masks and keeping minimum distances in public spaces, are likely to remain in place well into 2022. Vaccinations and social distancing measures will have to run in parallel for quite some time to effectively control the contagion. And from a pure medical perspective, in the fight against the coronavirus, vaccines will continue to be combined with additional COVID-19 treatments like antibody therapies, antivirals and plasma-derived therapies. <\/li><\/ul><p class=\"ucrIndent\">1) Our estimates are based on the following theoretical formula for herd immunity: p(t)=(1 - 1\/R0 ) \/ ', where p(t) represents the percentage of the population to be vaccinated for herd immunity, R0 is the basic reproduction number and ' is the vaccine efficacy. For more detail, see Challenges in creating herd immunity to SARS-CoV-2 infection by mass vaccination, https:\/\/www.thelancet.com\/journals\/lancet\/article\/PIIS0140-6736(20)32318-7\/fulltext<\/p>"},{"layout":"linklist","uid":23808,"publicationDate":"08 Nov 12:32","emaObject":{"protectedFileLink":"https:\/\/www.research.unicredit.eu\/DocsKey\/economics_docs_2020_178410.ashx?EXT=pdf&KEY=C814QI31EjqIm_1zIJDBJNz_HpRJyanXnQcdeIyNTY8=&T=1","protectedFileLinkDe":"https:\/\/www.research.unicredit.eu\/DocsKey\/economics_docs_2020_178410.ashx?EXT=pdf&KEY=C814QI31EjqIm_1zIJDBJNz_HpRJyanXnQcdeIyNTY8=&T=1","protectedFileLinkIt":"https:\/\/www.research.unicredit.eu\/DocsKey\/economics_docs_2020_178410.ashx?EXT=pdf&KEY=C814QI31EjqIm_1zIJDBJNz_HpRJyanXnQcdeIyNTY8=&T=1"},"title":"Global Chief Economist's Comment: Sunday Wrap","product":"Chief Economist's Comment","synopsis":"<ul class=\"ucrBullets\"><li><strong> In the US: <\/strong> What now'<\/li><\/ul><ul class=\"ucrBullets\"><li> And as the US \u201cnormalises\u201d, it\u2019s back to our normal work: The European Commission published its new forecast this past week, but it also stuck with its problematic approach to output gaps, with potentially serious consequences for fiscal guidance.<\/li><\/ul><ul class=\"ucrBullets\"><li> The role of monetary policy. Following the clear and positive message from the ECB in late October, we got good news from the Bank of England and the Fed this past week \u2013 but a problematic story from an unknown ECB source.<\/li><\/ul>"},{"layout":"linklist","uid":23798,"publicationDate":"05 Nov 14:22","emaObject":{"protectedFileLink":"https:\/\/www.research.unicredit.eu\/DocsKey\/economics_docs_2020_178400.ashx?EXT=pdf&KEY=C814QI31EjqIm_1zIJDBJNz_HpRJyanXdnhY8o1hEDw=&T=1","protectedFileLinkDe":"","protectedFileLinkIt":""},"title":"Chart of the Week - Car sector coming to the rescue of the German economy","product":"Chart of the Week","synopsis":"<ul class=\"ucrBullets\"><li> An unlikely candidate has come to the rescue of the German economy: the auto industry. As released this morning, new orders in the car sector rose further strongly in September and even exceeded their pre-crisis level in February by nearly 6%. <\/li><\/ul><ul class=\"ucrBullets\"><li> The latest \u201crally\u201d of German automakers is a big surprise after being put under pressure by structural transformation needs towards green energies and being battered by the lockdown in spring. At that time, new orders plunged by more than 60%, far more than in any other key sector such as machinery and chemicals. <\/li><\/ul><ul class=\"ucrBullets\"><li> Domestic new orders in the car industry also managed to rise somewhat above their pre-crisis level, possibly supported by the temporary VAT cut. However, the key driver was demand from abroad. We suspect that the rebound in Chinese and US auto sales helped but also the purchase incentives in some European countries, such as France and Italy. <\/li><\/ul><ul class=\"ucrBullets\"><li> While the latest new orders figures are the September data, they provide some hope for the German economy at the turn of the year. Assuming no massive cancellation of already collected orders, carmakers can work them off and increase their output in the next few months. This may dampen the negative impact from the recent lockdown on overall GDP. <\/li><\/ul>"},{"layout":"linklist","uid":23744,"publicationDate":"01 Nov 12:16","emaObject":{"protectedFileLink":"https:\/\/www.research.unicredit.eu\/DocsKey\/economics_docs_2020_178353.ashx?EXT=pdf&KEY=C814QI31EjqIm_1zIJDBJBqck91mwFXhfVw5Npd4_jE=&T=1","protectedFileLinkDe":"https:\/\/www.research.unicredit.eu\/DocsKey\/economics_docs_2020_178353.ashx?EXT=pdf&KEY=C814QI31EjqIm_1zIJDBJBqck91mwFXhfVw5Npd4_jE=&T=1","protectedFileLinkIt":"https:\/\/www.research.unicredit.eu\/DocsKey\/economics_docs_2020_178353.ashx?EXT=pdf&KEY=C814QI31EjqIm_1zIJDBJBqck91mwFXhfVw5Npd4_jE=&T=1"},"title":"Chief Economist\u00b4s Comment - Sunday Wrap","product":"Chief Economist's Comment","synopsis":"<ul class=\"ucrBullets\"><li> The Q3 GDP bounce across the OECD, published this past week, is already being interrupted by the second wave and a new series of lockdowns. The policy responses are being rolled out.<\/li><\/ul><ul class=\"ucrBullets\"><li> Two days to go to the US election \u2013 two reflections on what became clearer during these past four years, and a prediction for Tuesday and what it\u2019s likely to mean for markets.<\/li><\/ul>"},{"layout":"linklist","uid":23718,"publicationDate":"28 Oct 11:21","emaObject":{"protectedFileLink":"https:\/\/www.research.unicredit.eu\/DocsKey\/economics_docs_2020_178313.ashx?EXT=pdf&KEY=C814QI31EjqIm_1zIJDBJBqck91mwFXhSDqeTAlWhpk=&T=1","protectedFileLinkDe":"","protectedFileLinkIt":""},"title":"Chart of the Week - Exposure to the longer-run economic effects of COVID","product":"Chart of the Week","synopsis":"<ul class=\"ucrBullets\"><li> Our Chart of the Week provides a simple measure of the likely relative exposure to the longer-run effects of the COVID-19 pandemic for selected major economies. For each country, it shows consumption for different categories of spending before the COVID-19 crisis, expressed as a share of total consumption in that country.1) The pandemic has generated huge substitution effects across different categories of consumer spending, notably away from \u201csocial\u201d consumption and towards other categories. To the extent these effects persist, it will require large reallocations of resources away from declining sectors and towards growth sectors. Such an adjustment is highly unlikely to be smooth nor costless. Our chart shows that Spain and the UK are the most exposed in our sample, with the US, Germany and France less exposed.2) <\/li><\/ul><ul class=\"ucrBullets\"><li> During the COVID-19 crisis, spending on \u201csocial consumption\u201d, such as restaurants, hotels, recreation and cultural services, has declined sharply, while spending on \u201ctransport\/getting about\u201d has also been hit by working-from-home and lower demand for travel. Other categories have benefited from the substitution, with staples such as food-at-home performing strongly, while \u201cdelayable\u201d (or durable goods) items, such as purchases of cars, which are less exposed to social-distancing, have benefited too, also thanks to government incentive schemes in some eurozone countries. Part of the recent strength of durables is likely due to (temporary) pent-up demand after the lockdown, while increased uncertainty will likely weigh on underlying demand for durables ahead.3)<\/li><\/ul><ul class=\"ucrBullets\"><li> The extent of the reallocation of resources will depend on how long the pandemic lasts and the extent of fiscal support for jobs and businesses in the hardest-hit sectors. The longer the pandemic lasts (new daily cases are rising again globally, with Europe in the midst of a second wave and the US now experiencing a third wave) and the less effective fiscal policy is at bridging the period of weak demand, the larger the required adjustment will be. In this respect, the expiration of key fiscal support measures in the US is a concern, while the extension of fiscal support measures across Europe is welcome, including the latest U-turn by the UK Chancellor in improving the generosity of the Job Support Scheme.<\/li><\/ul><ul class=\"ucrBullets\"><li> The economic costs of the adjustment, which will be visible in higher (long-term) unemployment and the associated loss of skills, will also depend on the flexibility of the domestic labor market and the amount of hiring and investment in growth sectors to expand capacity. On the latter, the outlook is not promising, as the huge uncertainty the pandemic has created has led to a slump in investment and job vacancies remain well below pre-pandemic levels. The adjustment is made more challenging by the fact that the hardest-hit sectors are also relatively low-skilled (although productivity gains could be achieved if these workers are successfully re-employed in higher-productivity sectors) and re-training will take some time. Policymakers considering withdrawing or reducing fiscal support in the near term should reflect on the fact that the costs of sectoral readjustment are typically of a magnitude larger when the adjustment is not smoothed over time.<\/li><\/ul>"},{"layout":"linklist","uid":23680,"publicationDate":"25 Oct 10:44","emaObject":{"protectedFileLink":"https:\/\/www.research.unicredit.eu\/DocsKey\/economics_docs_2020_178270.ashx?EXT=pdf&KEY=C814QI31EjqIm_1zIJDBJBa9DS-RyP7KPm6atlA2-EE=&T=1","protectedFileLinkDe":"https:\/\/www.research.unicredit.eu\/DocsKey\/economics_docs_2020_178270.ashx?EXT=pdf&KEY=C814QI31EjqIm_1zIJDBJBa9DS-RyP7KPm6atlA2-EE=&T=1","protectedFileLinkIt":"https:\/\/www.research.unicredit.eu\/DocsKey\/economics_docs_2020_178270.ashx?EXT=pdf&KEY=C814QI31EjqIm_1zIJDBJBa9DS-RyP7KPm6atlA2-EE=&T=1"},"title":"Chief Economist\u00b4s Comment - Sunday Wrap","product":"Chief Economist's Comment","synopsis":"<p><ul class=\"ucrBullets\"><li> Some common considerations on the issue of rules versus adaptive policy making.<\/p><\/li><\/ul><p><ul class=\"ucrBullets\"><li> The specifics of the review of the fiscal rules.<\/p><\/li><\/ul><p><ul class=\"ucrBullets\"><li> The specifics of the monetary policy review.<\/p><\/li><\/ul>"},{"layout":"linklist","uid":23647,"publicationDate":"20 Oct 13:01","emaObject":{"protectedFileLink":"https:\/\/www.research.unicredit.eu\/DocsKey\/economics_docs_2020_178235.ashx?EXT=pdf&KEY=C814QI31EjqIm_1zIJDBJBa9DS-RyP7K79gmH3Jawsg=&T=1","protectedFileLinkDe":"","protectedFileLinkIt":""},"title":"Chart of the Week - Europe\u00b4s second wave: Soaring new cases to raise pressure on health facilities","product":"Chart of the Week","synopsis":"<ul class=\"ucrBullets\"><li> Our Chart of the Week shows that the second wave of the pandemic in Europe has been characterized by a surge in the number of new COVID-19 infections, while the number of patients in intensive care units (ICUs) has been rising only moderately so far. This stands in stark contrast to developments during the first wave, in March-April, when daily new cases were about one-third of today\u2019s level, but there were many more patients in need of intensive care. <\/li><\/ul><ul class=\"ucrBullets\"><li> Several factors explain the decoupling, which started over the summer, between daily new cases and the number of patients being admitted to ICUs: 1. Testing and tracking capacity has greatly increased in recent months, raising the number of asymptomatic cases that can be detected. Instead, during the first wave, only symptomatic individuals were tested, and some of these were already experiencing severe illness. 2. Progress has been made in the medical treatment of COVID-19, including with anti-viral and anti-inflammatory drugs. 3. The second wave mainly started with infections spreading among young people, which tend to be less vulnerable to the effects of the virus. However, following this initial phase, the average age of COVID-19 patients has been rising again. <\/li><\/ul><ul class=\"ucrBullets\"><li> The relatively shallow increase in the number of severely ill patients in this second wave of the pandemic is good news but should not be interpreted as ground for complacency. This time, we expect the number of patients in ICUs to lag behind the number of new cases, while, in the first wave, the two curves moved broadly in sync, largely due to the features of the testing activity mentioned above. Given that new COVID-19 cases started to accelerate markedly at the beginning of October, with no signs of a flattening-out apparent yet, and given that scientific studies put the median time to ICU admission at 10-12 days from the onset of illness or symptoms1), the ICU curve will very likely steepen over the next few weeks. This will raise pressure on health facilities, although probably not to the extent seen in March and April. If so, targeted restrictions and local lockdowns will likely remain the main tools used by governments to fight the pandemic while trying to minimize damage to economic activity. <\/li><\/ul>"},{"layout":"linklist","uid":23625,"publicationDate":"18 Oct 11:54","emaObject":{"protectedFileLink":"https:\/\/www.research.unicredit.eu\/DocsKey\/economics_docs_2020_178211.ashx?EXT=pdf&KEY=C814QI31EjqIm_1zIJDBJBa9DS-RyP7KSChJwg2b01Y=&T=1","protectedFileLinkDe":"https:\/\/www.research.unicredit.eu\/DocsKey\/economics_docs_2020_178211.ashx?EXT=pdf&KEY=C814QI31EjqIm_1zIJDBJBa9DS-RyP7KSChJwg2b01Y=&T=1","protectedFileLinkIt":"https:\/\/www.research.unicredit.eu\/DocsKey\/economics_docs_2020_178211.ashx?EXT=pdf&KEY=C814QI31EjqIm_1zIJDBJBa9DS-RyP7KSChJwg2b01Y=&T=1"},"title":"Chief Economist\u00b4s Comment - Sunday Wrap","product":"Chief Economist's Comment","synopsis":"<p><ul class=\"ucrBullets\"><li> On Brexit, I don\u2019t know if we\u2019ll get a deal before year-end, but I\u2019m convinced that one day we will get one. In the meantime, so much damage has been done to the UK\u2019s reputation \u2013 and unnecessary cost has been added to businesses because of the uncertainty.<\/p><\/li><\/ul><p><ul class=\"ucrBullets\"><li> Turning to the main topic of the IMF meetings, the second wave of the pandemic, I\u2019ll argue that the risk it poses to the (rather commonly agreed) GDP outlook may be relatively limited, but it still calls for urgent additional national fiscal support\u2026<\/p><\/li><\/ul><p><ul class=\"ucrBullets\"><li> and I\u2019ll summarise why you don\u2019t need to worry about the additional public debt.<\/p><\/li><\/ul>"},{"layout":"linklist","uid":23530,"publicationDate":"11 Oct 11:27","emaObject":{"protectedFileLink":"https:\/\/www.research.unicredit.eu\/DocsKey\/economics_docs_2020_178137.ashx?EXT=pdf&KEY=C814QI31EjqIm_1zIJDBJC8J2iL5sf3nf816wjJYS4k=&T=1","protectedFileLinkDe":"https:\/\/www.research.unicredit.eu\/DocsKey\/economics_docs_2020_178137.ashx?EXT=pdf&KEY=C814QI31EjqIm_1zIJDBJC8J2iL5sf3nf816wjJYS4k=&T=1","protectedFileLinkIt":"https:\/\/www.research.unicredit.eu\/DocsKey\/economics_docs_2020_178137.ashx?EXT=pdf&KEY=C814QI31EjqIm_1zIJDBJC8J2iL5sf3nf816wjJYS4k=&T=1"},"title":"Chief Economist\u00b4s Comment - Sunday Wrap","product":"Chief Economist's Comment","synopsis":"<p><ul class=\"ucrBullets\"><li> The signs of cooling domestic demand in Europe and the need for more stimulus. If you need a solid macro reason for such measures, recent numbers from the Bundesbank provide just that.<\/p><\/li><\/ul><p><ul class=\"ucrBullets\"><li> Trump seems to get increasingly desperate as he stands to lose the election on November 3. I\u2019ll summarize what he can (and probably will) do to create chaos after the election in his attempt to hang on to power (and prevent a return to his business, which increasingly has been revealed as a house of cards.) With American society deeply divided and increasingly disrespectful of each other, I worry about the risk of civil unrest.<\/p><\/li><\/ul>"},{"layout":"linklist","uid":23522,"publicationDate":"09 Oct 9:00","emaObject":{"protectedFileLink":"https:\/\/www.research.unicredit.eu\/DocsKey\/economics_docs_2020_178126.ashx?EXT=pdf&KEY=C814QI31EjqIm_1zIJDBJC8J2iL5sf3n8dOfmg_nYdc=&T=1&T=1","protectedFileLinkDe":"https:\/\/www.research.unicredit.eu\/DocsKey\/economics_docs_2020_178133.ashx?EXT=pdf&KEY=C814QI31EjqIm_1zIJDBJC8J2iL5sf3n3-2EHjf-mqw=&T=1&T=1","protectedFileLinkIt":""},"title":"US Election Brief: The growth implications of Trump\u00b4s and Biden\u00b4s fiscal plans","product":"Economics Flash","synopsis":"<p class=\"ucrIndent\"><p>This is the third part in a series covering US elections. The first was about opinion polls and possible electoral outcomes, while the second discussed the distributional impact of the tax plans proposed by the two presidential candidates. The next one will be on trade policy.<\/p><\/p><p><ul class=\"ucrBullets\"><li> The fiscal agendas of the two presidential candidates are radically different.<\/p><\/li><\/ul><p><ul class=\"ucrBullets\"><li> Donald Trump proposes to extend beyond 2025 the tax provision of the Tax Cuts and Jobs Act in an almost budget-neutral way through 2030. Joe Biden, instead, has a more comprehensive plan, which combines more progressive taxation with higher spending. Biden\u00b4s proposal is more likely to boost GDP (and inflation) than Trump\u00b4s. It is also likely to increase the budget deficit at a time when debt pressure is rising as a result of the COVID-19 crisis.<\/p><\/li><\/ul><p><ul class=\"ucrBullets\"><li> Under Biden, and assuming his fiscal agenda is fully implemented, US GDP might be 5-6.5pp higher by 2024 (in cumulative terms) than projected under a current-policy baseline, with additional primary budget deficits standing at around 1.5% of GDP each year through 2024. Instead, the Trump agenda might boost GDP by 1.0pp at most, with a more limited impact on the deficit (with extra annual primary budget deficits of around 0.5% of GDP through 2024). <\/p><\/li><\/ul>"}]

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5a46a2c43e8e161ff27c8db9247c563174973a5631ee155242991b73f3c4a1ec;;[{"layout":"linklist","uid":20947,"publicationDate":"21 Nov 15:58","emaObject":{"protectedFileLink":"https:\/\/www.research.unicredit.eu\/DocsKey\/economics_docs_2019_175301.ashx?EXT=pdf&KEY=C814QI31EjqIm_1zIJDBJHMnXtAfRLRLb27Bgb0Reb0=&T=1","protectedFileLinkDe":"https:\/\/www.research.unicredit.eu\/DocsKey\/economics_docs_2019_175466.ashx?EXT=pdf&KEY=C814QI31EjqIm_1zIJDBJBCfutLg1NcopqcBL9sGGRk=&T=1&T=1","protectedFileLinkIt":""},"title":"UniCredit Macro & Markets - 2020-21 Outlook: Late-cycle blues","product":"Macro & Markets","synopsis":"<p><ul class=\"ucrBullets\"><li><strong> Macro: <\/strong> Global growth is set to weaken further to 2.7% in 2020, as the US economy is likely to enter a downturn, protectionist tensions are unlikely to fade materially and the resilience of the domestic drivers of eurozone growth starts to wane. The Fed will probably cut rates by 100bp, while the ECB is expected to stand pat and focus on its policy review. Economic growth in the CEE region will likely slow as a result of external headwinds.<\/p><\/li><\/ul><p><ul class=\"ucrBullets\"><li><strong> FI: <\/strong> Government bonds should remain supported throughout 2020. We expect 10Y US yields to fall to 1.50%, with the curve bull-steepening. Room for lower Bund yields is more limited as the bar for further ECB rate cuts is high and the Bund curve is quite flat. The 10Y yield will likely hit -0.50% at end-2020.<\/p><\/li><\/ul><p><ul class=\"ucrBullets\"><li><strong> FX: <\/strong> Narrower growth and rate differentials between the US and the eurozone offer EUR-USD some upside potential. We expect the GBP to recover but this will likely be slowed by BoE easing and the risk of a Brexit-related \u201ccliff edge\u201d in December 2020.<\/p><\/li><\/ul><p><ul class=\"ucrBullets\"><li><strong> Equities: <\/strong> We anticipate strong corrections of up to 20% in global equities in 1H20, with some relief by year-end. 2020 will be dominated by low earnings growth in Europe and slowing earnings growth in the US. We think present consensus estimates are too high.<\/p><\/li><\/ul><p><ul class=\"ucrBullets\"><li><strong> Credit: <\/strong> The late-stage credit cycle warrants defensive positioning in European IG and HY credit, with a preference for non-cyclical sectors. Technical factors such as the CSPP should support credit, though this will likely be balanced by a deterioration in credit fundamentals and the gap to valuations will widen further.<\/p><\/li><\/ul><p><ul class=\"ucrBullets\"><li><strong> CEEMEA: <\/strong> EM hard-currency credit is set to post a good, mostly carry-related performance in 2020 of more than 5%. Our preference remains BBB and BB rated credit.<\/p><\/li><\/ul>","hash":"5a46a2c43e8e161ff27c8db9247c563174973a5631ee155242991b73f3c4a1ec","available":"0","settings":{"layout":"linklist","size":"default","showanalysts":"0","showcompanies":"0","showcountries":"0","showcurrencies":"0","nodate":"0","notitle":"0","noproduct":"0","noflags":"0","dateformat":"d M G:i","nolinktitle":"0","synopsislength":"400","synopsisexpand":"0","shownav":"0","oldestedition":"","limit":"1"}}]

a4cdae097062004f4cf519496761beb23ec0de3a6728b0ab26a7d15635102a0a;;[{"layout":"linklist","uid":23724,"publicationDate":"29 Oct 8:09","emaObject":{"protectedFileLink":"https:\/\/www.research.unicredit.eu\/DocsKey\/fxfistrategy_docs_2020_178319.ashx?EXT=pdf&KEY=KZGTuQCn4lsvclJnUgseVFcI2-vTFR2nRi29dMwdIovM3G3jxYh8vw==&T=1","protectedFileLinkDe":"","protectedFileLinkIt":""},"title":"Rates Perspectives - Exploring the impact of EU bonds on the EGB market","product":"Rates Perspectives","synopsis":"<ul class=\"ucrBullets\"><li> The ECB\u2019s strong presence in the sovereign-bond market, which we expect to continue through next year, together with robust demand from foreign central banks will further increase the scarcity of safe assets in the euro area. <\/li><\/ul><ul class=\"ucrBullets\"><li> EU bonds could become an alternative to Bunds going forward, given their high rating, provided that their outstanding grows fast. Low ECB buying would also be desirable, to leave most outstanding bonds to private investors. From a portfolio perspective, EU bonds have shown a high and stable correlation with Bunds.<\/li><\/ul><ul class=\"ucrBullets\"><li> Small and mid-size sovereign issuers are likely to face stronger competition from EU bonds, given they will feature similar liquidity. EU bonds also offer good diversification relative to semi-core bonds, as underpinned by their more-stable performance in times of market stress.<\/li><\/ul><ul class=\"ucrBullets\"><li> The EU will become a key player in the EUR-denominated SSA primary market, but we do not expect that the higher liquidity and volume of EU bonds will negatively influence demand for other Supras and Agencies due to the relatively small yield pickup they offer.<\/li><\/ul>","hash":"a4cdae097062004f4cf519496761beb23ec0de3a6728b0ab26a7d15635102a0a","available":"0","settings":{"layout":"linklist","size":"default","showanalysts":"0","showcompanies":"0","showcountries":"0","showcurrencies":"0","nodate":"0","notitle":"0","noproduct":"0","noflags":"0","dateformat":"d M G:i","nolinktitle":"0","synopsislength":"400","synopsisexpand":"0","shownav":"0","oldestedition":"","limit":"4"}},{"layout":"linklist","uid":23280,"publicationDate":"14 Sep 10:29","emaObject":{"protectedFileLink":"https:\/\/www.research.unicredit.eu\/DocsKey\/fxfistrategy_docs_2020_177861.ashx?EXT=pdf&KEY=KZGTuQCn4lsvclJnUgseVFcI2-vTFR2nyfW5CoPOGyGcSR2zWP6xCA==&T=1&T=1","protectedFileLinkDe":"","protectedFileLinkIt":""},"title":"Rates Perspectives - Heavier supply at the long end to meet with Fed QE","product":"Rates Perspectives","synopsis":"<ul class=\"ucrBullets\"><li> US marketable debt is likely to rise significantly in the coming quarters, with the Treasury probably aiming to lengthen debt maturity. Looking at the past, we analyze which impact a change in funding mix might have on the slope of the UST curve.<\/li><li> As foreign investors\u00b4 demand for USTs is likely to remain lukewarm in the near future, action by the Fed will be key to keeping yields subdued.<\/li><\/ul>"},{"layout":"linklist","uid":22843,"publicationDate":"09 Jul 8:35","emaObject":{"protectedFileLink":"https:\/\/www.research.unicredit.eu\/DocsKey\/fxfistrategy_docs_2020_177386.ashx?EXT=pdf&KEY=KZGTuQCn4lsvclJnUgseVFcI2-vTFR2nO6XLPK2SkhnVq7fg7fdZMA==&T=1","protectedFileLinkDe":"","protectedFileLinkIt":""},"title":"Rates Perspectives - Weakening fundamentals unlikely to weigh on OATs","product":"Rates Perspectives","synopsis":"<ul class=\"ucrBullets\"><li> OATs widened relative to Bunds at the beginning of the COVID-19 crisis, in line with other EGB spreads, but have since re-traced, with the 10Y OAT\/Bund spread returning to around 30bp, broadly in line with the pre-COVID average. <\/li><\/ul><ul class=\"ucrBullets\"><li> In our view, there are several factors that make a widening of the OAT\/Bund spread unlikely in the next few months. <\/li><\/ul><ul class=\"ucrBullets\"><li> Macro fundamentals for France, which have deteriorated fast since the outbreak of the pandemic in line with all the other eurozone countries, have not been a major factor driving OATs spreads wider in the past, and we expect this to be the case this time too. <\/li><\/ul><ul class=\"ucrBullets\"><li> The risk of a rating downgrade of France is moderate and even this would not be a good enough reason for OAT spread widening in our view. <\/li><\/ul><ul class=\"ucrBullets\"><li> With the Eurosystem absorbing most of net OAT issuance this year, the portion of French debt held by price-insensitive investors would remain high (around 40%) even if foreign officials were to reduce their exposure to French debt (not our baseline scenario). <\/li><\/ul><ul class=\"ucrBullets\"><li> All in all, the high liquidity and relative safety of OATs and the yield pickup to Bunds they offer will continue to make OATs a good investment, especially given the lack of valid alternatives. We therefore consider any temporary widening of the OAT-Bund spread a buying opportunity.<\/li><\/ul>"},{"layout":"linklist","uid":22393,"publicationDate":"19 May 7:32","emaObject":{"protectedFileLink":"https:\/\/www.research.unicredit.eu\/DocsKey\/fxfistrategy_docs_2020_176890.ashx?EXT=pdf&KEY=KZGTuQCn4lsvclJnUgseVFcI2-vTFR2nW1DHnTvta0o0CL0_mPxnUg==&T=1","protectedFileLinkDe":"","protectedFileLinkIt":""},"title":"Rates Perspectives - T-LTRO III: Take-up expectation and market impact","product":"Rates Perspectives","synopsis":"<ul class=\"ucrBullets\"><li> At its last meeting, the ECB announced a sizable reduction in T-LTRO III cost. Banks will pay 0.5% below the depo rate if they meet certain lending conditions and 0.5% below the MRO rate otherwise. <\/li><\/ul><ul class=\"ucrBullets\"><li><strong> The attractive pricing should lead to a large take-up: <\/strong> EUR\u00a0900-1,400bn gross and EUR 550-1,000bn net, adding the four operations. Net demand includes EUR\u00a0325bn already drawn from the bridge LTRO.<\/li><\/ul><ul class=\"ucrBullets\"><li> As the more favorable pricing applies to the period June 2020 \u2013 June 2021, we expect strong front loading at the June operation (settlement 24 June 2020, maturity June 2023, results to be announced on 18 June). <\/li><\/ul><ul class=\"ucrBullets\"><li> We expect that use of T-LTRO III liquidity will be more pronounced in the periphery than in core countries.<\/li><\/ul><ul class=\"ucrBullets\"><li> The need to temporary park liquidity may benefit the short end of sovereign curves, in particular in the periphery, where credit premiums and liquidity parking needs are expected to be stronger. Past experience, however, suggests not to expect big moves in credit spreads.<\/li><\/ul>"}]

eada0c4ea76c629eb47a2c699db2ed6e715070a11680a5d9921f837e1ffd3a5f;;[{"layout":"linklist","uid":21554,"publicationDate":"14 Feb 15:36","emaObject":{"protectedFileLink":"https:\/\/www.research.unicredit.eu\/DocsKey\/fxfistrategy_docs_2020_175974.ashx?EXT=pdf&KEY=KZGTuQCn4lsvclJnUgseVFcI2-vTFR2nw6n3SIBxpGTmDpAUviCpvg==&T=1","protectedFileLinkDe":"https:\/\/www.research.unicredit.eu\/DocsKey\/fxfistrategy_docs_2020_176061.ashx?EXT=pdf&KEY=KZGTuQCn4lsvclJnUgseVFcI2-vTFR2nNTt7vdgznH-Jqun0zij8HQ==&T=1&T=1","protectedFileLinkIt":""},"title":"Shortened version of the Euro Credit Pilot (February 2020)","product":"Euro Credit Pilot - Strategy","synopsis":"<p class=\"ucrIndent\"><p>This is a shortened version of the Euro Credit Pilot, which we deem to be an acceptable minor non-monetary benefit under MiFID II.<\/p><\/p><p><ul class=\"ucrBullets\"><li><strong> Introduction: <\/strong> The outbreak of the coronavirus has already led to the disruption of global supply chains, with numerous producers across sectors reporting production halts at facilities in China. The related uncertainties warrant defensive positioning in European credit.<\/p><\/li><\/ul><p><ul class=\"ucrBullets\"><li><strong> Macro Outlook: <\/strong> So far there is little data on the initial impact on the global economy, and comparisons with the SARS outbreak in 2002 are not straightforward. But 1Q growth-related data will be negative.<\/p><\/li><\/ul><p><ul class=\"ucrBullets\"><li><strong> Micro Fundamentals: <\/strong> Sluggish earnings growth in Europe will negatively impact companies\u2019 credit fundamentals.<\/p><\/li><\/ul><p><ul class=\"ucrBullets\"><li><strong> Credit Quality Trend: <\/strong> The global economic outlook has become clouded, and the risk of economic slowdown in China due to the coronavirus has increased. Thus, the overall credit quality of European companies will likely decrease as indicated by the potential number of fallen angels.<\/p><\/li><\/ul><p><ul class=\"ucrBullets\"><li><strong> Market Technicals: <\/strong> With the intensification of CSPP purchases, particularly in the primary market, the ECB is providing continuous support.<\/p><\/li><\/ul><p><ul class=\"ucrBullets\"><li><strong> Valuation &amp; Timing: <\/strong> We are keeping our end-2020 spread projections unchanged.<\/p><\/li><\/ul><p><ul class=\"ucrBullets\"><li><strong> Sector Allocation &amp; Recommendation Overview: <\/strong> Uncertainties related to the coronavirus and its ramifications for Chinese growth and the global supply chain warrant defensive positioning. In this context, we lower our recommendation on Automobiles &amp; Parts to underweight from marketweight. We also lower our recommendation on Basic Resources to marketweight from overweight.<\/p><\/li><\/ul>","hash":"eada0c4ea76c629eb47a2c699db2ed6e715070a11680a5d9921f837e1ffd3a5f","available":"0","settings":{"layout":"linklist","size":"default","showanalysts":"-1","showcompanies":"-1","synopsislength":"-1","showcountries":"-1","showcurrencies":"-1","synopsisexpand":"0","nodate":"0","notitle":"0","dateformat":"d M G:i","nolinktitle":"0","noproduct":"0","noflags":"0","shownav":"0","oldestedition":"","limit":"2"}},{"layout":"linklist","uid":21100,"publicationDate":"10 Dec 14:54","emaObject":{"protectedFileLink":"https:\/\/www.research.unicredit.eu\/DocsKey\/fxfistrategy_docs_2019_175468.ashx?EXT=pdf&KEY=KZGTuQCn4lsvclJnUgseVEGHysWJl2NsdbHS0TJ1vmUJDnt4SYQWKQ==&T=1","protectedFileLinkDe":"https:\/\/www.research.unicredit.eu\/DocsKey\/fxfistrategy_docs_2019_175539.ashx?EXT=pdf&KEY=KZGTuQCn4lsvclJnUgseVEGHysWJl2NsY9mVAida0HvS49pKYFDFew==&T=1&T=1","protectedFileLinkIt":""},"title":"Shortened version of the Euro Credit Pilot (December 2019)","product":"Euro Credit Pilot - Strategy","synopsis":"<p class=\"ucrIndent\"><p>This is a shortened version of the Euro Credit Pilot, which we deem to be an acceptable minor non-monetary benefit under MiFID II.<\/p><\/p><p class=\"ucrIndent\"><p>The late stage of the credit cycle will likely be prolonged by the extraordinary ECB policy measures. Performance in European credit is being pulled in one direction by cyclical headwinds (projected in our below-consensus growth forecast and a mild recession in the US), low earnings growth and upside risks in new-bond supply. It is pulled in another direction by monetary-policy easing, which fuels the hunt for yield. As a result of these forces being exerted on European credit, we expect spreads in the iBoxx Senior NFI and the iBoxx Financials Senior to be flat, on balance, reaching 60bp by the end of 2020, i.e. close to current levels. Thus, carry is expected to be the main source of return in European credit in 2020. Spreads in the iBoxx HY are expected to widen to 450bp during the same period.<\/p><\/p>"}]

cee45ec3c62a2f7c371ab5aeacebf397b3dfcda3558749efec14891ce5a1d50e;;[{"layout":"linklist","uid":23417,"publicationDate":"29 Sep 14:47","emaObject":{"protectedFileLink":"https:\/\/www.research.unicredit.eu\/DocsKey\/emergingmarkets_docs_2020_178012.ashx?EXT=pdf&KEY=l6KjPzSYBBGzROuioxedUNdVqq1wFeRoiETVGOc4CclMYgA95iO7Gg==&T=1","protectedFileLinkDe":"https:\/\/www.research.unicredit.eu\/DocsKey\/emergingmarkets_docs_2020_178236.ashx?EXT=pdf&KEY=l6KjPzSYBBGzROuioxedUNdVqq1wFeRoo_jQ-J-mJwxjZVQolmyazA==&T=1&T=1","protectedFileLinkIt":""},"title":"CEE Quarterly - CEE: The long and winding recovery (4Q20)","product":"CEE Quarterly","synopsis":"<p><ul class=\"ucrBullets\"><li> The economic rebound in CEE was swift in May-July, powered by a rebound in consumer spending and a prompt unwinding of restrictions.<\/p><\/li><\/ul><p><ul class=\"ucrBullets\"><li> However, the rapid removal of restrictions and poor compliance with regulation led to a faster flare-up in COVID-19 cases than in the eurozone, especially in the Balkans.<\/p><\/li><\/ul><p><ul class=\"ucrBullets\"><li> We see three sources of differentiation in the upcoming recovery: 1. the spread of the pandemic; 2. the measures taken to contain it and 3. the efficiency, scope and time horizon of support measures taken by governments and central banks.<\/p><\/li><\/ul><p><ul class=\"ucrBullets\"><li> We expect EU-CEE economies to contract by 5.5% in 2020, with the economies of Russia, Serbia and Turkey shrinking by 2.5-4%.<\/p><\/li><\/ul><p><ul class=\"ucrBullets\"><li> The recovery in 2021 could be incomplete in all countries but Serbia and Turkey, slowed by fiscal and credit impulses, as well as economic and (geo)political risks<\/p><\/li><\/ul><p><ul class=\"ucrBullets\"><li> The CBR could cut the repo rate to 4% if inflationary and geopolitical risks abate. The NBR could cut the policy rate to 1% if fiscal profligacy is avoided.<\/p><\/li><\/ul><p><ul class=\"ucrBullets\"><li> The CBRT could increase rates by 2pp before year-end, before reversing this year\u2019s hikes in 2H21. The CNB might be the first EU-CEE central bank to increase rates next year.<\/p><\/li><\/ul><p><ul class=\"ucrBullets\"><li> We see little scope for FX and bond rallies in CEE in 4Q20. ROMGBs and ROMANIs are the exception if fiscal spending is reined in. The outlook is better for bonds in 2021.<\/p><\/li><\/ul><p><ul class=\"ucrBullets\"><li><strong> Risk assessment: <\/strong> There are limited threats to the economic policy mix from political instability in Bulgaria. If pensions increase by 40%, Romania could lose its investment grade and face political instability after the elections. There is a risk of limited sanctions against Russia due to Belarus and the poisoning of Alexei Navalny. There is a low risk that Hungary and Poland may veto the Next Generation EU (NGEU) framework. Geopolitical and sanction risks against Turkey remain due to tensions in the Mediterranean.<\/p><\/li><\/ul>","hash":"cee45ec3c62a2f7c371ab5aeacebf397b3dfcda3558749efec14891ce5a1d50e","available":"0","settings":{"layout":"linklist","size":"default","showanalysts":"0","showcompanies":"0","showcountries":"0","showcurrencies":"0","nodate":"0","notitle":"0","noproduct":"0","noflags":"0","dateformat":"d M G:i","nolinktitle":"0","synopsislength":"400","synopsisexpand":"0","shownav":"0","oldestedition":"","limit":"1"}}]

bd87e708c56b3b8a9552819c45c998d45a56266083972c3b154575aaa4cc495c;;[{"layout":"linklist","uid":17097,"publicationDate":"23 Apr 8:01","emaObject":{"protectedFileLink":"\/fileadmin\/Presentations_ex_Marketingpraesi\/Praesentation_Call_ReesForUBK_20Apr20.pdf","protectedFileLinkDe":"","protectedFileLinkIt":""},"title":"Presentation - Coronavirus und seine volkswirtschaftlichen Auswirkungen","product":"Presentation","synopsis":"","hash":"bd87e708c56b3b8a9552819c45c998d45a56266083972c3b154575aaa4cc495c","available":"0","settings":{"layout":"linklist","size":"default","showanalysts":"-1","showcompanies":"-1","synopsislength":"-1","showcountries":"-1","showcurrencies":"-1","synopsisexpand":"0","nodate":"0","notitle":"0","dateformat":"d M G:i","nolinktitle":"0","noproduct":"0","noflags":"0","shownav":"0","oldestedition":"","limit":"1"}}]

fca5774f669803887558f1f8bf49f8ba6cbad35f9de48a9f1720f5619f212128;;[{"layout":"linklist","uid":23417,"publicationDate":"29 Sep 14:47","emaObject":{"protectedFileLink":"https:\/\/www.research.unicredit.eu\/DocsKey\/emergingmarkets_docs_2020_178012.ashx?EXT=pdf&KEY=l6KjPzSYBBGzROuioxedUNdVqq1wFeRoiETVGOc4CclMYgA95iO7Gg==&T=1","protectedFileLinkDe":"https:\/\/www.research.unicredit.eu\/DocsKey\/emergingmarkets_docs_2020_178236.ashx?EXT=pdf&KEY=l6KjPzSYBBGzROuioxedUNdVqq1wFeRoo_jQ-J-mJwxjZVQolmyazA==&T=1&T=1","protectedFileLinkIt":""},"title":"CEE Quarterly - CEE: The long and winding recovery (4Q20)","product":"CEE Quarterly","synopsis":"<p><ul class=\"ucrBullets\"><li> The economic rebound in CEE was swift in May-July, powered by a rebound in consumer spending and a prompt unwinding of restrictions.<\/p><\/li><\/ul><p><ul class=\"ucrBullets\"><li> However, the rapid removal of restrictions and poor compliance with regulation led to a faster flare-up in COVID-19 cases than in the eurozone, especially in the Balkans.<\/p><\/li><\/ul><p><ul class=\"ucrBullets\"><li> We see three sources of differentiation in the upcoming recovery: 1. the spread of the pandemic; 2. the measures taken to contain it and 3. the efficiency, scope and time horizon of support measures taken by governments and central banks.<\/p><\/li><\/ul><p><ul class=\"ucrBullets\"><li> We expect EU-CEE economies to contract by 5.5% in 2020, with the economies of Russia, Serbia and Turkey shrinking by 2.5-4%.<\/p><\/li><\/ul><p><ul class=\"ucrBullets\"><li> The recovery in 2021 could be incomplete in all countries but Serbia and Turkey, slowed by fiscal and credit impulses, as well as economic and (geo)political risks<\/p><\/li><\/ul><p><ul class=\"ucrBullets\"><li> The CBR could cut the repo rate to 4% if inflationary and geopolitical risks abate. The NBR could cut the policy rate to 1% if fiscal profligacy is avoided.<\/p><\/li><\/ul><p><ul class=\"ucrBullets\"><li> The CBRT could increase rates by 2pp before year-end, before reversing this year\u2019s hikes in 2H21. The CNB might be the first EU-CEE central bank to increase rates next year.<\/p><\/li><\/ul><p><ul class=\"ucrBullets\"><li> We see little scope for FX and bond rallies in CEE in 4Q20. ROMGBs and ROMANIs are the exception if fiscal spending is reined in. The outlook is better for bonds in 2021.<\/p><\/li><\/ul><p><ul class=\"ucrBullets\"><li><strong> Risk assessment: <\/strong> There are limited threats to the economic policy mix from political instability in Bulgaria. If pensions increase by 40%, Romania could lose its investment grade and face political instability after the elections. There is a risk of limited sanctions against Russia due to Belarus and the poisoning of Alexei Navalny. There is a low risk that Hungary and Poland may veto the Next Generation EU (NGEU) framework. Geopolitical and sanction risks against Turkey remain due to tensions in the Mediterranean.<\/p><\/li><\/ul>","hash":"fca5774f669803887558f1f8bf49f8ba6cbad35f9de48a9f1720f5619f212128","available":"0","settings":{"layout":"linklist","size":"default","showanalysts":"-1","showcompanies":"-1","synopsislength":"-1","showcountries":"-1","showcurrencies":"-1","synopsisexpand":"0","nodate":"0","notitle":"0","dateformat":"d M G:i","nolinktitle":"0","noproduct":"0","noflags":"0","shownav":"0","oldestedition":"","limit":"1"}}]

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