e2fda6f48f4beb7f2e9a16bde35b727c4d7cd8e0d73c422d49e7378ade652268;;[{"layout":"linklist","uid":23043,"publicationDate":"31 Jul 12:51","emaObject":{"protectedFileLink":"https:\/\/www.research.unicredit.eu\/DocsKey\/economics_docs_2020_177604.ashx?EXT=pdf&KEY=C814QI31EjqIm_1zIJDBJEB0bOkoPtCislR0RunoW4g=&T=1&T=1","protectedFileLinkDe":"","protectedFileLinkIt":""},"title":"Chart of the Week - 2Q20 GDP: It\u00b4s all about mobility, nothing about the future","product":"Chart of the Week","synopsis":"<ul class=\"ucrBullets\"><li> Our Chart of the Week shows that the contraction in GDP in the second quarter across Europe and in the US is closely associated with the change in mobility (i.e. the movement of people)1). In other words, the hit to GDP in the second quarter can largely be explained by the stringency and length of the government-ordered lockdown to contain the spread of COVID-19, and the speed of reopening in May and June. As a result, and importantly, the 2Q20 GDP figures tell us very little, if anything, about the medium-term economic outlook.<\/li><li> This point is best made by comparing the US experience with that of the eurozone. According to the first release of 2Q20 GDP, the US economy contracted 9.5% qoq (non-annualized), a less severe contraction than the 12.1% qoq fall in the eurozone. It simply, and almost entirely, reflects the less-stringent lockdown and early and aggressive reopening of the economy in the US compared to that of the eurozone.<\/li><li> The (too) early reopening of the US economy has come at a substantial cost in terms of public health and economic activity, although the latter won\u00b4t be registered in official GDP statistics until the 3Q20 GDP report is published in late October. Surging new cases of COVID-19 has led to an increase in voluntary social distancing and a partial rollback or suspension of reopening plans in several US states. In contrast, in the eurozone, new cases of COVID-19 remain low, despite localized outbreaks, and the economic recovery continued to progress nicely in July based on high-frequency indicators. Indeed, in the latest Google mobility data (up to 27 July), the US is now underperforming all the eurozone countries listed in our chart, with Germany leading the way, followed by Austria, France and Italy.1) The Google mobility indicator plotted here is for visitor numbers to places like restaurants, cafes, shopping centers, theme parks, museums, libraries, and movie theaters. Google measures visitor numbers every day and compares this to a baseline day before the COVID-19 outbreak. Baseline days are a normal value for that day of the week during the five-week period from 3 January to 6 February 2020. We plot the change in the average level between 1Q20 and 2Q20.<\/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":22985,"publicationDate":"26 Jul 13:04","emaObject":{"protectedFileLink":"https:\/\/www.research.unicredit.eu\/DocsKey\/economics_docs_2020_177540.ashx?EXT=pdf&KEY=C814QI31EjqIm_1zIJDBJC7GqOv-LIAyrEcvuYDNY5A=&T=1","protectedFileLinkDe":"https:\/\/www.research.unicredit.eu\/DocsKey\/economics_docs_2020_177540.ashx?EXT=pdf&KEY=C814QI31EjqIm_1zIJDBJC7GqOv-LIAyrEcvuYDNY5A=&T=1","protectedFileLinkIt":"https:\/\/www.research.unicredit.eu\/DocsKey\/economics_docs_2020_177540.ashx?EXT=pdf&KEY=C814QI31EjqIm_1zIJDBJC7GqOv-LIAyrEcvuYDNY5A=&T=1"},"title":"Chief Economist\u00b4s Comment - Sunday Wrap","product":"Chief Economist's Comment","synopsis":"<p class=\"MIBEditorial\"><ul class=\"ucrBullets\"><li> Will the pandemic remain under control or will we need another lockdown to contain a second wave'<\/p><\/li><\/ul><p class=\"MIBEditorial\"><ul class=\"ucrBullets\"><li> How fast will US-Chinese relations deteriorate, and what will be the consequences for Europe'<\/p><\/li><\/ul><p class=\"MIBEditorial\"><ul class=\"ucrBullets\"><li> Who\u2019ll win the US election in November and does it matter'<\/p><\/li><\/ul><p class=\"MIBEditorial\"><ul class=\"ucrBullets\"><li> Will the EUR 1.8 trillion multi-year budget and recovery fund get approved by all the necessary parliaments, and will it be ready for operation by January 1'<\/p><\/li><\/ul><p class=\"MIBEditorial\"><ul class=\"ucrBullets\"><li> Will the eurozone now \u2013 finally \u2013 complete the Banking and Capital Markets Union'<\/p><\/li><\/ul><p class=\"MIBEditorial\"><ul class=\"ucrBullets\"><li> Will the UK\u2019s transition period away from the EU really end at the end of the year, and will there be a deal or will it be a cliff edge exit'<\/p><\/li><\/ul><p class=\"MIBEditorial\"><ul class=\"ucrBullets\"><li> What will be the balance between fiscal and monetary policies in the eurozone'<\/p><\/li><\/ul><p class=\"MIBEditorial\"><ul class=\"ucrBullets\"><li> What will the credit rating agencies do'<\/p><\/li><\/ul><p class=\"MIBEditorial\"><ul class=\"ucrBullets\"><li> Markets will be chasing this \u201cnew European vision\u201d.<\/p><\/li><\/ul><p class=\"MIBEditorial\"><ul class=\"ucrBullets\"><li> What are the \u201cunknown unknowns\u201d'<\/p><\/li><\/ul>"},{"layout":"linklist","uid":22983,"publicationDate":"24 Jul 13:40","emaObject":{"protectedFileLink":"https:\/\/www.research.unicredit.eu\/DocsKey\/economics_docs_2020_177538.ashx?EXT=pdf&KEY=C814QI31EjqIm_1zIJDBJC7GqOv-LIAy4WBt_p2FDag=&T=1&T=1","protectedFileLinkDe":"","protectedFileLinkIt":""},"title":"Chart of the Week - Italy: A normalization in the usage of short-time working allowances has started","product":"Chart of the Week","synopsis":"<ul class=\"ucrBullets\"><li> Our Chart of the Week shows the latest developments in the usage of short-time working allowances in Italy. During the pandemic emergency, the government has allocated resources to increase access to these schemes, and this has contributed to mitigating the decline in the number of employed people between March and May.<\/li><li> In June, the total number of hours authorized for Cassa integrazione guadagni (short-time working allowances) declined by about 52% on a monthly basis, after a sizeable increase in April and a broad stabilization at a high level in May. This suggests that a process of normalization has started with the end of the country\u00b4s lockdown.<\/li><li> These job-protection measures for the pandemic emergency will remain in place until the beginning of 4Q20. However, the Italian government this week approved an increase in the budget deficit for this year, which should allow for the extension of these measures probably until the end of the year. This is expected to mitigate a potential cliff effect that might hurt the expected recovery in economic activity. Moreover, the government will likely make some changes to the legislation, which should gradually reduce the recourse to these allowances and incentivize hiring by firms.<\/li><\/ul>"},{"layout":"linklist","uid":22929,"publicationDate":"19 Jul 12:42","emaObject":{"protectedFileLink":"https:\/\/www.research.unicredit.eu\/DocsKey\/economics_docs_2020_177481.ashx?EXT=pdf&KEY=C814QI31EjqIm_1zIJDBJEIJVL9W1ece1DOKNs7brbE=&T=1&T=1","protectedFileLinkDe":"Pubblicazione disponibile solo in inglese&T=1","protectedFileLinkIt":"Pubblicazione disponibile solo in inglese&T=1"},"title":"Chief Economist\u00b4s Comment - Sunday Wrap","product":"Chief Economist's Comment","synopsis":"<p>Happy Sunday,As I\u00b4m starting to write this, the European leaders are getting up in Brussels after two bruising days of negotiations on the biggest and most consequential European initiative since the introduction of the Single Market almost 30 years ago.This morning they\u00b4ll be having a number of bilateral meetings before reconvening at noon for what will surely be a long afternoon and (probably) evening of negotiations. I remain optimistic that we\u00b4ll get an agreement, if not today, then before the end of the month. My biggest concern is the attempts to water it down both in terms of size and focus. Indeed, my key point in today\u00b4s note is that there is so much more at stake than just the details of the proposed mega-sized fund to help Europe recover from the lock-down. Maybe even more important is the underlying vision of creating an environmentally sustainable economy with a level of 'home grown' digitalization that will make it possible for Europe to navigate the now rapidly escalating conflict between the US and China, particularly in the area of technology. Of course, money is needed for this, but it seems that a number of political leaders may be missing the view of the forest here as they focus not only on the trees, but even on the branches on the trees. In a nutshell, with the help of Council President Michel, the co-authors of the all-important vision, French President Macron and German Chancellor Merkel, are trying to find a way between (roughly speaking) the North, who want to de-fund the effort to the extent possible, and the South and East (CEE) who want mostly unconditional money in the form of grants.So, in today\u00b4s note:<ul class=\"ucrBullets\"><li>I\u00b4ll first briefly reflect on the outstanding issues and how the 'branches on the trees' seem to have taken over.<\/li><li>I\u00b4ll then remind you of the most burning of the two key issues at stake here ' digitalization ' and how tensions between the US and China have accelerated in recent weeks to a degree where Europe now needs to take side'<\/li><li>' and for that to happen, corporate taxation, and particularly the practice of aggressive tax havens inside the EU, which are particularly heavily used by US tech companies, needs to be addressed. That has been brought to the forefront by Wednesday\u00b4s court ruling in favour of Ireland and Apple, and against the European Commission (and common sense.) <\/li><li> The outstanding issues and the confusion.According to media reports, the European leaders broke up late yesterday when, after two days, they still couldn\u00b4t bridge the gaps between the various sides on issues ranging from the size of the fund, to the split between loans and grants, to the issue of conditionality for receiving money. Reportedly, Council President Michel has proposed to cut the grant component to EUR 400bn (from EUR 450bn), which has frustrated Germany and France, as well as most of Southern and Eastern Europe, but EUR 400bn is still seen as way too big for the four frugals and Finland. Michel has also proposed to cut the incentives for private investment from EUR 30bn to EUR 11bn. This is one of the usual casualties when ' and I apologise in advance for the following description - political leaders turn into accountants, rather than leaders or visionaries. I\u00b4ll bet you that the cost to growth of that EUR 19bn cut in incentives will be much greater than the cut of EUR 50bn in grants to governments.Fundamental disagreement also remains on conditionality (for lack of a better word). The 'North' wants conditionality in terms of commitments to economic reforms and adherence to fundamental liberal values, and the ability for any one country to stop disbursements (via requirement of unanimous agreement in the Council for disbursements), if such 'conditionality' is being breached. Broadly speaking, the 'South' opposes policy conditionality; the 'East' opposes 'values' conditionality ' and both the 'South' and the 'East' opposes the requirement of unanimity in the approval of payments.I have lots of sympathy for a requirement of some sort of conditionality. This is about 'the vision' and not about debt relief or some other general-purpose spending, and of course, there is also the issue of 'Real-Politik'. How can any political leader sell to his or her own taxpayers the financial responsibility for a massive borrowing program with 'no strings attached' disbursements to another country' Yet, the debate has gone off on a bizarrely simplistic populist path in most countries, which surely serves no serious purpose:First, the public narrative in most Northern European countries is one of sending huge amounts of money to Southern Europe, particularly Italy. Yet, the real story is different. For years, Italy has been a financial net contributor to the EU, while Spain and Portugal have been relatively small net beneficiaries. The big net beneficiaries are all in Central Europe. As the UK\u00b4s roughly EUR 15bn in annual net financial contributions end, this picture would be more extreme in relative terms ' and that as Southern Europe has suffered much more severely from the pandemic than Central Europe. Still, the proposed mega-plan (which would borrowing EUR 750bn at near zero interest rates, if not negative rates) would make Italy a (relative small) net financial beneficiary, and the rest of Southern Europe slightly bigger beneficiaries ' while ploughing still more money into Central Europe. What would Northern Europe get in return' European growth and stability and (hopefully) a shared vision of liberal values and unity in a world where conflicts between the US and China roam.Second, these politically important and much-quoted numbers, calculated to tell countries whether they are net contributor or beneficiary, tell only a small part of the real financial story; i.e. before we start talking about the benefits of the Single Market and the common currency. For example, according to the Commission\u00b4s calculations, the Netherlands was a net contributor to the EU of EUR 2.4bn in 2018. Meanwhile, according to the Tax Justice Network, that same year, the Netherlands\u00b4 tax haven structures helped them grab EUR 6.7bn in tax receipts from Germany, France, Italy and Spain (ht Algebris\u00b4 Alberto Gallo.) Third, in most Northern European countries, including my native Denmark and in the Netherlands, the media ' driven by key politicians, labor union leaders and others ' is focusing on statements by e.g. Italian Finance Minister Gualtieri of the possibility of tax cuts and on the Italian government\u00b4s recent reversal of the pension reforms to (under certain circumstances) lower the pension age. So, the story goes, why should we help finance that' My view is that Italy ' and the rest of Europe ' should indeed follow Germany\u00b4s lead and provide further tax incentives, particularly temporary cuts in the VAT, to stimulate the recovery (which indeed was what Gualtieri was referring to). And before anyone gets too excited about pensions they should accept that it\u00b4s a rather complex issue, and comparisons are far from straight-forward. If interested, see this OECD piece from last year comparing Italian and other pension systems: https:\/\/www.oecd.org\/italy\/PAG2019-ITA.pdf. That all said, all of Europe should continue the drive to raise the pension age, but that\u00b4s for another day. <\/li><li> The most burning of the two key issues at stake here ' digitalization ' and how tensions between the US and China have accelerated in recent weeks to a degree where Europe now needs to take side'These past couple of weeks have made it clear (if it wasn\u00b4t before) that Europe urgently needs a strategy for how to navigate the rapidly accelerating conflict between the US and China with respect to technology. Coming late to the tech-game, Germany and France identified digitalization as a top priority (along with the green agenda) in the Macron-Merkel plan, hoping - in German Economics Minister Peter Altmaier\u00b4s words - to turn Europe into a 'digital powerhouse'. Any hope of doing so will require a massive, and well targeted, public investment program along with a set of incentives for the private sector to invest and develop this space. Unfortunately, judged by the negotiations now going on in Brussels, Germany and France have problems convincing their fellow Europeans, particularly the Four Frugals, of the necessity of this vision.And it\u00b4s urgent now. US-Chinese relations are fast descending into a state in which third party countries will be forced to choose sides, with, it seems, broader negative consequences for future relations with the other party. Particularly since May, when the US placed Huawei on its 'Entity List' (which means that any sale or transfer of US technology to Huawei now requires specific permission by the US Bureau of Industry and Security), US authorities have been leaning heavily on Europe to ban the company from participating in the forthcoming roll-out of 5G. Just last week, the US national security advisor was touring Europe to make that case.And, voila, this past week, the UK completed its labored U-turn and fell in line with US demands when Boris Johnson announced that Huawei will be excluded from the UK\u00b4s 5G network, triggering the expected further threats of retaliation from Beijing (a relationship already tortured by China\u00b4s handling of Hong Kong and the UK\u00b4s reaction). Meanwhile, Peter Almaier and several other key Germans have been emphasizing Europe\u00b4s commercial relationship with China, but as Brooking\u00b4s 'Germany explainer' and foreign and security expert, Constanze Stelzenmueller, argued in her piece in the FT this past week, it really isn\u00b4t a matter of 'choosing the US', but rather of 'not choosing' Huawei ' and China. If not clear before, recent weeks have demonstrated China\u00b4s foreign policy ambitions and its lack of respect for international treaties in its pursuit of broader global influence. And believing Huawei\u00b4s claim of independence from the state seems just a tad too na\u00efve. Stelzenmueller\u00b4s very read-worthy piece is here: Europe faces a fateful choice on Huawei.Yet, choosing (also if by default) US companies for the next generation technology comes with a number of serious issues as well, which reach far into the present negotiations in Brussels ' and into the functioning of the EU\u00b4s Single Market because these are companies which ' with the blessing, and now explicit defense, of the US government ' have exploited more than anyone the vastly distortive tax haven opportunities offered by a small number of EU members, most noticeably Ireland, Luxembourg, the Netherlands and Belgium.<\/li><li> Corporate taxation, and particularly the practice of aggressive tax havens inside the EU, which are particularly heavily used by US tech companies, needs to be addressed. That has been brought to the forefront by Wednesday\u00b4s court ruling in favour of Ireland and Apple.As I\u00b4m sure you know, the European Commission has been worried about these tax structures for a long time, while Berlin, Paris, Rome and Madrid have been strangely quiet on the issue. Of course, tax policies are solidly anchored as a national competency (maybe explaining part of the reason for the silence in major capitals), even though the effects are felt far beyond the national borders when they are applied to international companies. Therefore, the Commission has been circling the wagons for quite a while, shooting a few timid test arrows (read: claims of hidden subsidies which violate competition policies) into the compound to see what might start the desired fire, from where the battle could then begin.And, after winning (and losing) a few such minor attempts (with low double-digit million euros at stake), Commissioner Vestager and her Competition Directorate thought they had their big and obvious case. Ireland had handed Apple a truly extraordinary tax deal. To remind you, Apple had based its European business in Ireland, but had been allowed ' under Irish law ' to establish an entity with no tax domicile or employees between the US parent and its Irish branch, to which a huge chunk of Apple\u00b4s profits from its businesses around Europe was allocated. That this is acceptable to other countries is already peculiar to me, but the Commission\u00b4s bone was much more limited in scope than that. It simply claimed that by allowing this structure, cutting Apple\u00b4s tax liabilities by some EUR 13bn (and dropping Apple\u00b4s tax rate to something like 1%), Ireland had violated EU\u00b4s rules on state aid. (Ireland has since changed the law so that they no longer allow this specific structure for tax avoidance.)Yet, as I\u00b4m sure you noticed, just this past Wednesday, Europe\u00b4s second highest court ruled that the Commission had not demonstrated sufficiently that this absurdly advantageous tax deal handed out by Ireland to Apple constitutes a subsidy which would have distorted competition in the EU. I have a ton of respect for Apple and its products (and design), but wow! ' if their dominant position, enormous profits and matching share price (or price\/earnings) do not hint at subsidies and\/or near-monopoly status, and hence distortions, I don\u00b4t know what doesIn any case, the US has threatened retaliation if Europe were to crack down on these tax avoidance schemes exploited by US companies operating in Europe ' and if France, and other Europeans, carry through with their planned taxation of digital businesses. I\u00b4ll get back to this.Wednesday\u00b4s court ruling in favor of Ireland and Apple ' and, more broadly, the corporate tax haven structures being operated inside the EU ' are relevant for the European mega-package and broader vision because it relates to European growth across a level playing field (the Single Market), the European vision of becoming more self-reliant in technology, and because of the relative responsibilities for the future servicing of the common debt now being planned.I have written about the deeply troublesome tax haven structures inside the eurozone before, quoting OECD data and academic research which clearly illustrate the huge shifts in multinational corporates\u00b4 profits away from a number of countries with 'normal' tax regimes, including Germany France, Italy and Spain, and to, particularly, Ireland, Luxembourg, the Netherlands and Belgium.Today, I\u00b4ll just throw one more statistic at you to illustrate the absurdity of what\u00b4s being offered by some EU countries to divert multinational companies\u00b4 taxes to places without any even remotely comparable share of their production or sales, thereby fueling the politically troublesome developments in income distribution (capital has gained about five percentage points over labor during the past 15-20 years) and preventing the development of a comparable European tech industry:According to the CIA World Factbook, the world\u00b4s greatest host of FDI investment (i.e. the 'stock' of FDI) at the end of 2017 (latest available data) was the Netherlands with an eyewatering USD 4.9 trillion of foreign investments 'invested' in the country (taking in no less than USD 58bn in 2017 alone, according to, not entirely comparable, UN data), surpassing such major (also business friendly) countries like the US (USD4.1 trillion) and the UK (USD 2.0 trillion). Ireland is the fifth biggest host of FDI, at USD 1.5 trillion, at par with, e.g., China and Germany. Belgium is the 9th biggest host for FDI at USD 1.1 trillion.May I suggest that even if just a fraction of these FDIs in the Netherlands, Ireland and Belgium were 'real' foreign direct investment in terms of producing goods and services, as opposed to tax-convenient mailboxes, every building in those rather small countries would have to be tens of stories high to house all these activities!Let\u00b4s be real and say it as it is: This involves European governments facilitating massive tax avoidance schemes at the cost of others: Other European countries and European citizens in other countries. And the effects of these bizarre schemes are clear. They include an overall taxation of the participating multinationals\u00b4 profits which are completely out of proportion with other companies\u00b4 tax burden which surely distorts competition in their favor ' call it a subsidy or not. It also contributes to a massive scale of redirection of tax revenue away from countries where the companies\u00b4 actual activity takes place, be it production or sales. How this is acceptable between partner countries which share a Single Market, the currency and now [soon] a meaningful amount of debt, is simply beyond me.Returning to the case of the day, this past week\u00b4s court ruling in favor of Ireland and Apple, I\u00b4ll make three points in conclusion of today\u00b4s note:First, there is probably a strong case why the Commission should appeal the decision to the highest court, even if the issue is much greater than this case:In an excellent piece in the FT, Martin Sandbu notes that the court did not dispute the possibility that special tax arrangements may constitute illegal state aid, but they ruled that the Commission had not established that this arrangement was specifically for Apple, and it could, therefore, not be called 'state aid'. As noted above, even though it may be right that this truly bizarre arrangement was available to other companies, it surely could only be used by huge global companies with lots of profits generated by intellectual property, and not by smaller start-ups; so while it may not have been exactly like state aid, it surely distorted competition.The court also ruled that while it was unclear (and maybe erroneous) how the Irish authorities allowed the exact portions of Apple\u00b4s European profits to be assigned to this ghost-unit, the Commission had not proven that these unclear decisions always had been made to the advantage of Apple (to which I say 'wow', and nothing else).As Sandbu writes, 'if the law really allows this, the law is an ass and should indeed be changed', but he also concludes that it\u00b4s not entirely clear that that\u00b4s what the law says. So, he concludes, the Commission should appeal ' and do a better job preparing the case. Martin Sandbu\u00b4s piece, which is highly recommended, is here: The EU\u00b4s economic case against Apple and IrelandSecond, while saying that they\u00b4ll study the ruling (obviously with a view to possible appeal), the Commission used the date of the ruling to publish a major initiative to harmonize corporate taxation. This has obviously been in the oven for a long time, but accelerated after the Macron-Merkel plan talked about it as well. And rather than keep pursuing these crazy tax avoidance deals along the 'competition' avenue, as their weapon of choice, they now say they\u00b4ll activate (for the first time) Article 116 of the Treaty, which ' in a broader sense ' prohibits policies that 'distort the Single Market'.This would be a laborious process under which the Commission first has to identify the distortion caused by the differences in a member state\u00b4s 'law, regulation or administrative action' from others, then argue that such distortion 'needs to be eliminated', and then it needs to go and consult with the member state in this case. If this then does not lead to an acceptable outcome, the European Parliament and Council can agree with a qualified majority (i.e. with at least 55% of the member states representing at least 65% of the population) on directives which would address the issue.The neat thing here is, supposedly, that decisions can be taken with qualified majority, thereby bringing distortive taxation practices away from national parliaments and on to the European level. What I am not clear about, however, is the type of consequences the EU would ' or could ' impose on a country that 'plays games' by fiddling the tax regime a bit in order to simply start this multi-year process again.In conclusion, my third point is the following broader one: Whether the Commission appeals or not, and whether it pursues these arrangements via Art 116 or not, the tax haven issue is greater than a matter of policing. Rather, it is one of policy ' and of attitude. Without a common fiscal authority ' obviously anchored in a democratic process - there really is no simple solution to some countries\u00b4 belligerent tax policies, even if they impair European growth, cohesion and ' potentially - political stability. Ultimately, the great distortions and unfairness brought about by these tax deals are rooted in the inherent conflict between global businesses and free capital movements versus national policies.I\u00b4ll argue ' maybe another day in more detail ' that this conflict played a major role in the undoing of the globalization process we now witness, at potentially huge cost to growth and living standards around the world, precisely because of the lack of a functioning global governance structure.Maybe that was (sadly) inevitable on the global level, but it ought not be the case in the EU. While far from perfect, one of the least appreciated (by many in the market) strengths of the EU is the peer pressure and power of persuasion among ministers in the councils. We saw this in abundance during the financial crisis, the sovereign crisis and specifically the Greek crisis.But while the major countries, including Germany and France, along with the Northern countries 'happily' and effectively teamed up and put their collective persuasive powers to good work back then, why the same big countries, and everyone else, apart from the four key offenders, don\u00b4t do the same towards these four outliers beats me.But one thing is clear. As long as European corporate taxation is not broadly harmonized, leaving huge benefits to multinationals\u00b4 ' including US tech firms\u00b4 ' operations in Europe, there is a real need to impose a different type of taxation on those companies\u00b4 activities, e.g. at point of sales, or user level. France has opened this avenue, and the US administration has raised all sorts of retaliatory threats if they carry through.To me, however, these are threats well worthwhile dealing with. First, there is a rather good chance that the present US administration won\u00b4t be around much longer, although while a Biden administration will surely address the general deficiencies in US corporate taxation, it\u00b4s not clear it\u00b4ll take a more cooperative stance towards Europe.But then again, that\u00b4ll be a matter of money, rather than of national security, which is what the Chinese route to 5G would imply. I know what I would prefer ' until Europe gets its act together on its own digitalization.And on that note, I\u00b4ll wrap it up for today with the hope that common sense and an understanding of the bigger issues for Europe will prevail in Brussels today.BestErik<\/p><\/li><\/ul>"},{"layout":"linklist","uid":22926,"publicationDate":"17 Jul 10:38","emaObject":{"protectedFileLink":"https:\/\/www.research.unicredit.eu\/DocsKey\/economics_docs_2020_177478.ashx?EXT=pdf&KEY=C814QI31EjqIm_1zIJDBJEIJVL9W1eceh0WpPbPNTew=&T=1&T=1","protectedFileLinkDe":"https:\/\/www.research.unicredit.eu\/DocsKey\/economics_docs_2020_177494.ashx?EXT=pdf&KEY=C814QI31EjqIm_1zIJDBJEIJVL9W1eceJia1OWfum0o=&T=1&T=1","protectedFileLinkIt":"https:\/\/www.research.unicredit.eu\/DocsKey\/economics_docs_2020_177480.ashx?EXT=pdf&KEY=C814QI31EjqIm_1zIJDBJEIJVL9W1eceeCGbG8qspgc=&T=1&T=1"},"title":"Oil Update - OPEC+ tapers cuts, ignoring the inventory glut","product":"Oil Update","synopsis":"<ul class=\"ucrBullets\"><li> OPEC+ has decided to start tapering its production cuts in August thanks to high compliance and recovering global demand. <\/li><li> The decision risks being too rushed. Even in the most benign scenario that rules out a second severe wave of the coronavirus, the market will struggle to absorb the inventories accumulated in recent months. <\/li><li> The inventory hangover is likely to weigh on prices for the rest of the year. Should the trajectory of the coronavirus be less favorable than currently expected, OPEC+ will likely be forced to scale back its tapering process ' with all the political difficulties associated with a decision of this kind.<\/li><\/ul>"},{"layout":"linklist","uid":22925,"publicationDate":"17 Jul 9:12","emaObject":{"protectedFileLink":"https:\/\/www.research.unicredit.eu\/DocsKey\/economics_docs_2020_177475.ashx?EXT=pdf&KEY=C814QI31EjqIm_1zIJDBJEIJVL9W1ecesocCjKtBt7g=&T=1&T=1","protectedFileLinkDe":"","protectedFileLinkIt":""},"title":"Economics Thinking - Italy\u00b4s public debt: New challenges brought on by the COVID-19 crisis","product":"Economics Thinking","synopsis":"<ul class=\"ucrBullets\"><li> The COVID-19 crisis will weigh heavily on global public-debt dynamics. This constitutes a vulnerability, particularly for Italy. In this note, we provide an assessment of the consequences for Italy of running a higher public-debt\/GDP ratio and update our debt sustainability analysis. <\/li><li><strong> Our main conclusion is as follows: <\/strong> 1. a more-favorable starting point in terms of interest rates mitigates the risk related to an increase in the fiscal burden of debt; and 2. despite its higher level, Italy\u00b4s public-debt\/GDP ratio is projected to decline if interest rates align with market expectations.<\/li><li> We conclude by explaining how Italy could benefit from a decision to activate the European Stability Mechanism\u00b4s (ESM) Pandemic Crisis Support and from a contribution from the European Commission\u00b4s (EC) Next Generation EU instrument. The role Italy decides to have in Europe will contribute to shaping its debt dynamic in the long run.<\/li><\/ul>"},{"layout":"linklist","uid":22892,"publicationDate":"14 Jul 14:06","emaObject":{"protectedFileLink":"https:\/\/www.research.unicredit.eu\/DocsKey\/economics_docs_2020_177440.ashx?EXT=pdf&KEY=C814QI31EjqIm_1zIJDBJEIJVL9W1ecebpDCFf6MjQQ=&T=1","protectedFileLinkDe":"","protectedFileLinkIt":""},"title":"Chart of the Week - Credit demand from eurozone firms: The great divide","product":"Chart of the Week","synopsis":"<ul class=\"ucrBullets\"><li> Our Chart of the Week shows an interesting development revealed by the ECB\u2019s Bank Lending Survey for the second quarter, which was published this morning. Banks reported a further massive increase in credit demand from firms, but there was a huge disconnection between surging financing needs for inventories and working capital, and a big drop in credit demand for fixed investment.<\/li><\/ul><ul class=\"ucrBullets\"><li> The net percentage of eurozone banks reporting higher demand for liquidity to finance inventories and working capital hit a new all-time high (black line); this was clearly driven by the liquidity squeeze caused by the COVID-19 crisis and was strongly supported by state guarantees. In contrast, the net percentage for financing needs for fixed investment (red line) tumbled, indicating a marked deterioration in the investment outlook. Consistent with this picture, loan demand was higher for SMEs than for large firms (smaller firms tend to have comparatively thinner cash buffers and less ability to raise funding in financial markets) and significantly higher for short-term loans than for long-term loans. Banks also indicated that their credit standards had eased for short-term loans but tightened for long-term loans.<\/li><\/ul><ul class=\"ucrBullets\"><li> At the national level, demand for corporate loans increased considerably in all the largest eurozone countries, although banks in Germany mentioned that demand for guaranteed loans overall was lower than expected.<\/li><\/ul><ul class=\"ucrBullets\"><li> Eurozone banks expect corporate credit demand to continue to grow in the current quarter, but at a significantly slower pace. They also expect a considerable net tightening of credit standards for loans to enterprises, which is reported to be related to the expected end of state loan-guarantee schemes in some large euro area countries. <\/li><\/ul>"},{"layout":"linklist","uid":22890,"publicationDate":"14 Jul 11:22","emaObject":{"protectedFileLink":"https:\/\/www.research.unicredit.eu\/DocsKey\/emergingmarkets_docs_2020_177437.ashx?EXT=pdf&KEY=l6KjPzSYBBGzROuioxedUNdVqq1wFeRoaQO9Dr3O1_aap1TNAPxaTg==&T=1","protectedFileLinkDe":"","protectedFileLinkIt":""},"title":"CEE Quarterly - CEE: Starker Aufschwung, zerbrechliche Erholung (3Q20)","product":"CEE Quarterly","synopsis":"<p>\u00dcbersetzung der englischen Originalversion vom 25. Juni 2020<ul class=\"ucrBullets\"><li>Die wirtschaftlichen Aktivit\u00e4ten in den CEE-L\u00e4ndern erholen sich wieder, da die Lockdown-Beschr\u00e4nkungen allm\u00e4hlich gelockert werden, aber sie bleiben deutlich unter dem Niveau vor der COVID-19-Krise. Dar\u00fcber hinaus ist die Erholung mit vielen Risiken verbunden.<\/li><li>Regierungen und Zentralbanken haben umfangreiche Unterst\u00fctzungsprogramme durchgef\u00fchrt, die von 3,5% des BIP in Russland bis 23,5% des BIP in Tschechien reichen. <\/li><li>Die F\u00f6rderprogramme unterscheiden sich in Gr\u00f6\u00dfe, Umfang, Effizienz und Geschwindigkeit der Umsetzung. Diese Merkmale werden die Erholung im 2H20 und 2021 pr\u00e4gen.<\/li><li>Das gr\u00f6\u00dfte Risiko f\u00fcr die CEE-Volkswirtschaften ist eine zweite Pandemiewelle, auch wenn die Restriktionen nicht so streng ausfallen wie im M\u00e4rz-Mai 2020.<\/li><li>In EU-CEE1erwarten wir einen R\u00fcckgang des BIP um 8,3% im Jahr 2020 und ein Wachstum von 7,3% im Jahr 2021. Die Volkswirtschaften des Westbalkans k\u00f6nnten sich \u00e4hnlich entwickeln.<\/li><li>Russlands Wirtschaft d\u00fcrfte im Jahr 2020 um etwa 5,4% schrumpfen und im n\u00e4chsten Jahr wieder um 3,8% zulegen.<\/li><li>In der T\u00fcrkei k\u00f6nnte das BIP in diesem Jahr um etwa 5,6% sinken und 2021 um 6,6% wachsen.<\/li><li>Wir erwarten weitere Zinssenkungen in Tschechien, Rum\u00e4nien, Russland, Serbien und der T\u00fcrkei. Lediglich Tschechien und Polen k\u00f6nnten im Jahr 2021 eine Zinserh\u00f6hung in Betracht ziehen.<\/li><li>Die Inflationsziele d\u00fcrften in den Jahren 2020-21 erreicht werden, k\u00f6nnten aber anschlie\u00dfend in Gefahr geraten, wenn die Binnennachfrage wieder anzieht.<\/li><li>Unseren Modellen zufolge sind die CZK, der HUF und der PLN unterbewertet, aber schlechte Handelsdaten und eine volatile Risikobereitschaft k\u00f6nnen potenzielle Rallyes verk\u00fcrzen; der RUB, der RON und der RSD sind \u00fcberbewertet.<\/li><li>ROMGBs und ROMANI EUR bleiben unsere Top-Empfehlung in der Region, da das zuvor in den Anleihen eingepreiste Risiko einer Rating-Herabstufung weiter abnehmen k\u00f6nnte.<\/li><li>OFZs, POLGBs und langfristige CZGBs bieten attraktive Bewertungen, sind aber mit Wechselkursrisiken konfrontiert. <\/li><li>Die \u00b4Recovery and Resilience Facility\u00b4 der EU ist f\u00fcr die EU-CEE-L\u00e4nder von entscheidender Bedeutung, jedoch nicht in den n\u00e4chsten zw\u00f6lf Monaten. 1EU-CEE umfasst Bulgarien, Kroatien, Tschechien, Ungarn, Polen, Rum\u00e4nien, die Slowakei und Slowenien - alles CEE-L\u00e4nder, die Mitglieder der EU sind.<\/p><\/li><\/ul>"},{"layout":"linklist","uid":22860,"publicationDate":"12 Jul 11:57","emaObject":{"protectedFileLink":"https:\/\/www.research.unicredit.eu\/DocsKey\/economics_docs_2020_177405.ashx?EXT=pdf&KEY=C814QI31EjqIm_1zIJDBJEIJVL9W1ece-A6umVmVsEA=&T=1","protectedFileLinkDe":"https:\/\/www.research.unicredit.eu\/DocsKey\/economics_docs_2020_177405.ashx?EXT=pdf&KEY=C814QI31EjqIm_1zIJDBJEIJVL9W1ece-A6umVmVsEA=&T=1","protectedFileLinkIt":"https:\/\/www.research.unicredit.eu\/DocsKey\/economics_docs_2020_177405.ashx?EXT=pdf&KEY=C814QI31EjqIm_1zIJDBJEIJVL9W1ece-A6umVmVsEA=&T=1"},"title":"Chief Economist\u00b4s Comment - Sunday Wrap","product":"Chief Economist's Comment","synopsis":"<p><ul class=\"ucrBullets\"><li> I\u2019ll summarize Council President Michel\u2019s compromise proposal for the recovery plan, which I think is close to what the outcome will be. The Frugals\u2019 success in the Eurogroup will not translate into success in derailing the Recovery Fund.<\/p><\/li><\/ul><p><ul class=\"ucrBullets\"><li> I\u2019ll discuss my point that what the Eurogroup election does illustrate, however, is a likely setback for the broader vision of Europe, specifically for harmonizing corporate tax structures to level the playing field and generate common revenues to service the common debt.<\/p><\/li><\/ul><p><ul class=\"ucrBullets\"><li> Also this past week \u2013 and with a considerably more constructive message - European Fiscal Board Chairman Thygesen presented the EFB\u2019s report to the Eurogroup with clear messages on the return to the fiscal rules.<\/p><\/li><\/ul>"},{"layout":"linklist","uid":22822,"publicationDate":"07 Jul 12:14","emaObject":{"protectedFileLink":"https:\/\/www.research.unicredit.eu\/DocsKey\/economics_docs_2020_177364.ashx?EXT=pdf&KEY=C814QI31EjqIm_1zIJDBJPhOzJ5ypEnETEPTLOYxfzQ=&T=1","protectedFileLinkDe":"","protectedFileLinkIt":""},"title":"Chart of the Week - Eurozone car registrations rising from the ashes","product":"Chart of the Week","synopsis":"<ul class=\"ucrBullets\"><li> In the four big EMU countries, car registrations in June rebounded for the second consecutive month after shrinking by up to nearly 100% yoy in April. Especially strong was the jump in France where car registrations even recorded a minor increase of about 1% yoy (April: -89% yoy). <\/li><\/ul><ul class=\"ucrBullets\"><li> These timely available macro indicators flag substantial pent-up demand and are the first signs of a further rebound in overall eurozone economic activity in June. The latest data also indicate a successful crisis management by European governments in gradually reducing measures of social isolation and implementing fiscal stimulus packages. <\/li><\/ul><ul class=\"ucrBullets\"><li> In France, a cash-for-clunkers program and incentives for e-cars led to a significant frontloading of auto purchases. While some payback sooner or later is inevitable, the strong rise helps in easing the economic pain and building a bridge to the second half of 2020. <\/li><\/ul><ul class=\"ucrBullets\"><li> Car registrations in Italy and Spain still shrank in June by 23% yoy and 37% yoy, respectively. However, this came after basically zero sales activity in April. Further rebounds in the next few months are likely, given incentive programs for auto purchases underway. <\/li><\/ul><ul class=\"ucrBullets\"><li> In Germany, the temporary VAT cut to 16% from 19%, which kicked in at the start of July, may also help in boosting auto sales (June: -32% yoy). German car producers already announced to pass on the lower prices to the full extent. <\/li><\/ul>"},{"layout":"linklist","uid":22794,"publicationDate":"05 Jul 11:30","emaObject":{"protectedFileLink":"https:\/\/www.research.unicredit.eu\/DocsKey\/economics_docs_2020_177331.ashx?EXT=pdf&KEY=C814QI31EjqIm_1zIJDBJPhOzJ5ypEnEt-Qkv7AjsCg=&T=1","protectedFileLinkDe":"https:\/\/www.research.unicredit.eu\/DocsKey\/economics_docs_2020_177331.ashx?EXT=pdf&KEY=C814QI31EjqIm_1zIJDBJPhOzJ5ypEnEt-Qkv7AjsCg=&T=1&T=1","protectedFileLinkIt":"https:\/\/www.research.unicredit.eu\/DocsKey\/economics_docs_2020_177331.ashx?EXT=pdf&KEY=C814QI31EjqIm_1zIJDBJPhOzJ5ypEnEt-Qkv7AjsCg=&T=1&T=1"},"title":"Chief Economist\u00b4s Comment - Sunday Wrap","product":"Chief Economist's Comment","synopsis":"<ul class=\"ucrBullets\"><li> I\u2019ll remind you of why Europe has been an excellent place to live, work and invest for the past many years.<\/li><\/ul><ul class=\"ucrBullets\"><li> I\u2019ll argue \u2013 with examples from just this past week \u2013 that the global environment has become very troublesome as the US has become a global disrupter rather than global leader, and as China and Russia are playing increasingly dangerous games in the vacuum.<\/li><\/ul><ul class=\"ucrBullets\"><li> Europe needs to react to this increasingly anarchistic world, and the good news is that\u2019s what\u2019s happening now under German and French leadership. I\u2019ll sketch the way through the next few months\u2019 big decisions and argue that the prospect for investment and growth is, indeed, pretty good.<\/li><\/ul>"},{"layout":"linklist","uid":22793,"publicationDate":"03 Jul 14:23","emaObject":{"protectedFileLink":"https:\/\/www.research.unicredit.eu\/DocsKey\/economics_docs_2020_177329.ashx?EXT=pdf&KEY=C814QI31EjqIm_1zIJDBJPhOzJ5ypEnEWfi5PXRN5hI=&T=1&T=1","protectedFileLinkDe":"","protectedFileLinkIt":""},"title":"Chart of the Week - US: Virus spread causing voluntary social distancing ","product":"Chart of the Week","synopsis":"<ul class=\"ucrBullets\"><li> Our Chart of the Week plots the daily number of restaurant seated diners compared to the same day one-year ago in selected US states. It reveals that those states that are experiencing a surge in the number of new daily confirmed cases of COVID-19, notably Arizona, California, Florida, Georgia and Texas, have seen restaurant diners drop in recent weeks, with the biggest declines in those states that had reopened earlier and more aggressively.<\/li><li> The fall in seated diners came before many states announced a rollback or suspension of plans to further reopen the economy. For example, the Governor of Texas announced on 26 June that restaurant capacity would be ordered to fall from 75% to 50% effective from Monday 29 June, but restaurant seated diners had already fallen from -44% yoy on 19 June to -61% yoy on 25 June. On 1 July the Governor of California ordered the closure of dine-in restaurants in 19 counties across the state. Arizona, Florida and Georgia have not imposed new restrictions on restaurants. Therefore, and importantly, even in the absence of a government-ordered lockdown, the spread of the virus has caused a significant increase in voluntary social distancing. Indeed, restaurant seated diners is probably a reliable proxy for other social activities that are deemed at high risk of contagion, and where voluntary social distancing has likely increased.<\/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"}}]

70b64a2fa8ca8e904ac55b5e50870240a46cc1bcd6a29dfa55543971008506d4;;[{"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>","hash":"70b64a2fa8ca8e904ac55b5e50870240a46cc1bcd6a29dfa55543971008506d4","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":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>"},{"layout":"linklist","uid":22151,"publicationDate":"23 Apr 8:19","emaObject":{"protectedFileLink":"https:\/\/www.research.unicredit.eu\/DocsKey\/fxfistrategy_docs_2020_176630.ashx?EXT=pdf&KEY=KZGTuQCn4lsvclJnUgseVFcI2-vTFR2nlVdqzbTp94Q4BdEhR8EC5A==&T=1","protectedFileLinkDe":"","protectedFileLinkIt":""},"title":"Rates Perspectives - Eurozone funding needs in 2020 after COVID-19","product":"Rates Perspectives","synopsis":"<ul class=\"ucrBullets\"><li> The COVID emergency will lead to a massive increase in public debt and deficit in 2020. We now expect net issuance of marketable debt instruments issued by eurozone governments (bonds and bills) in 2020 to amount to around EUR 1tn, up from EUR 185bn before the COVID-19 emergency. <\/li><\/ul><ul class=\"ucrBullets\"><li> Net marketable debt issuance could be up to EUR 310bn lower, in case eurozone countries use financing measures approved so far by the Eurogroup, and could be substantially lower depending on the size and functioning of the recovery fund which will be discussed today at the European Council meeting. <\/li><\/ul><ul class=\"ucrBullets\"><li> T-bills are coming back in fashion as funding instruments. At the eurozone level, we expect 40% of net issuance to come in the form of T-bills and to see a sharp increase in net T-bill issuance, especially from core countries. The abundance of excess liquidity in the system and the ECB\u2019s pandemic emergency purchasing program (PEPP), which can also buy T-bills, should prevent pressure from building up at the short end of the curve. <\/li><\/ul><ul class=\"ucrBullets\"><li> Our estimates are accompanied by very high degrees of uncertainty, as we await more details on measures approved by the Eurogroup on 9 April and for developments at the European Council meeting today.<\/li><\/ul>"},{"layout":"linklist","uid":21711,"publicationDate":"03 Mar 8:11","emaObject":{"protectedFileLink":"https:\/\/www.research.unicredit.eu\/DocsKey\/fxfistrategy_docs_2020_176143.ashx?EXT=pdf&KEY=KZGTuQCn4lsvclJnUgseVFcI2-vTFR2n46XMXAIB2V6cPOOjdj7_cg==&T=1&T=1","protectedFileLinkDe":"","protectedFileLinkIt":""},"title":"Rates Perspectives - 10\/30Y BTP spread: A steepener trade looks better than a flattener","product":"Rates Perspectives","synopsis":"<ul class=\"ucrBullets\"><li> The 10\/30 BTP spread has flattened sizably since the beginning of February and currently trades at 95\/96bp (on Bloomberg fair value, 103\/104bp taking BTP Aug29 and Sep49), the lowest level since August 2019. <\/li><li> We present a fair value model for the 10\/30Y BTP spread based on the BTP 'idiosyncratic' premium (as a proxy for the BTP credit spread), the level of rates and supply pressure at the extra-long end of the curve. <\/li><li> Our model, based on Bloomberg fair value, indicates that the 10\/30Y spread should be more than 15bp steeper than where it is now.<\/li><li> Even with a larger BTP 'idiosyncratic' premium, a higher level of core rates and much lower supply pressure at the extra-long end compared to the start of this year, our model predicts virtually no flattening of the 10\/30Y spread from current levels. Given that 10\/30Y BTP flattener trades have a negative carry, we prefer to position for a steepener (with a slightly positive carry).<\/li><li> The key risk to this trade in the short-term is a prolonged risk-off market that continues to weigh on periphery and especially BTPs, or a scenario where idiosyncratic risk in Italy increases. <\/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":22890,"publicationDate":"14 Jul 11:22","emaObject":{"protectedFileLink":"https:\/\/www.research.unicredit.eu\/DocsKey\/emergingmarkets_docs_2020_177437.ashx?EXT=pdf&KEY=l6KjPzSYBBGzROuioxedUNdVqq1wFeRoaQO9Dr3O1_aap1TNAPxaTg==&T=1","protectedFileLinkDe":"","protectedFileLinkIt":""},"title":"CEE Quarterly - CEE: Starker Aufschwung, zerbrechliche Erholung (3Q20)","product":"CEE Quarterly","synopsis":"<p>\u00dcbersetzung der englischen Originalversion vom 25. Juni 2020<ul class=\"ucrBullets\"><li>Die wirtschaftlichen Aktivit\u00e4ten in den CEE-L\u00e4ndern erholen sich wieder, da die Lockdown-Beschr\u00e4nkungen allm\u00e4hlich gelockert werden, aber sie bleiben deutlich unter dem Niveau vor der COVID-19-Krise. Dar\u00fcber hinaus ist die Erholung mit vielen Risiken verbunden.<\/li><li>Regierungen und Zentralbanken haben umfangreiche Unterst\u00fctzungsprogramme durchgef\u00fchrt, die von 3,5% des BIP in Russland bis 23,5% des BIP in Tschechien reichen. <\/li><li>Die F\u00f6rderprogramme unterscheiden sich in Gr\u00f6\u00dfe, Umfang, Effizienz und Geschwindigkeit der Umsetzung. Diese Merkmale werden die Erholung im 2H20 und 2021 pr\u00e4gen.<\/li><li>Das gr\u00f6\u00dfte Risiko f\u00fcr die CEE-Volkswirtschaften ist eine zweite Pandemiewelle, auch wenn die Restriktionen nicht so streng ausfallen wie im M\u00e4rz-Mai 2020.<\/li><li>In EU-CEE1erwarten wir einen R\u00fcckgang des BIP um 8,3% im Jahr 2020 und ein Wachstum von 7,3% im Jahr 2021. Die Volkswirtschaften des Westbalkans k\u00f6nnten sich \u00e4hnlich entwickeln.<\/li><li>Russlands Wirtschaft d\u00fcrfte im Jahr 2020 um etwa 5,4% schrumpfen und im n\u00e4chsten Jahr wieder um 3,8% zulegen.<\/li><li>In der T\u00fcrkei k\u00f6nnte das BIP in diesem Jahr um etwa 5,6% sinken und 2021 um 6,6% wachsen.<\/li><li>Wir erwarten weitere Zinssenkungen in Tschechien, Rum\u00e4nien, Russland, Serbien und der T\u00fcrkei. Lediglich Tschechien und Polen k\u00f6nnten im Jahr 2021 eine Zinserh\u00f6hung in Betracht ziehen.<\/li><li>Die Inflationsziele d\u00fcrften in den Jahren 2020-21 erreicht werden, k\u00f6nnten aber anschlie\u00dfend in Gefahr geraten, wenn die Binnennachfrage wieder anzieht.<\/li><li>Unseren Modellen zufolge sind die CZK, der HUF und der PLN unterbewertet, aber schlechte Handelsdaten und eine volatile Risikobereitschaft k\u00f6nnen potenzielle Rallyes verk\u00fcrzen; der RUB, der RON und der RSD sind \u00fcberbewertet.<\/li><li>ROMGBs und ROMANI EUR bleiben unsere Top-Empfehlung in der Region, da das zuvor in den Anleihen eingepreiste Risiko einer Rating-Herabstufung weiter abnehmen k\u00f6nnte.<\/li><li>OFZs, POLGBs und langfristige CZGBs bieten attraktive Bewertungen, sind aber mit Wechselkursrisiken konfrontiert. <\/li><li>Die \u00b4Recovery and Resilience Facility\u00b4 der EU ist f\u00fcr die EU-CEE-L\u00e4nder von entscheidender Bedeutung, jedoch nicht in den n\u00e4chsten zw\u00f6lf Monaten. 1EU-CEE umfasst Bulgarien, Kroatien, Tschechien, Ungarn, Polen, Rum\u00e4nien, die Slowakei und Slowenien - alles CEE-L\u00e4nder, die Mitglieder der EU sind.<\/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"}}]

117a1401a3e679f4793fbdea09e9310312bd1e866a8f8ff792c82b0dd1e732fa;;[{"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":"117a1401a3e679f4793fbdea09e9310312bd1e866a8f8ff792c82b0dd1e732fa","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","limit":"1"}}]

dd8458919e2def29e8ea8d8b7115a33882ddbeac5dc60029b411fff7da396cdb;;[{"layout":"linklist","uid":22890,"publicationDate":"14 Jul 11:22","emaObject":{"protectedFileLink":"https:\/\/www.research.unicredit.eu\/DocsKey\/emergingmarkets_docs_2020_177437.ashx?EXT=pdf&KEY=l6KjPzSYBBGzROuioxedUNdVqq1wFeRoaQO9Dr3O1_aap1TNAPxaTg==&T=1","protectedFileLinkDe":"","protectedFileLinkIt":""},"title":"CEE Quarterly - CEE: Starker Aufschwung, zerbrechliche Erholung (3Q20)","product":"CEE Quarterly","synopsis":"<p>\u00dcbersetzung der englischen Originalversion vom 25. Juni 2020<ul class=\"ucrBullets\"><li>Die wirtschaftlichen Aktivit\u00e4ten in den CEE-L\u00e4ndern erholen sich wieder, da die Lockdown-Beschr\u00e4nkungen allm\u00e4hlich gelockert werden, aber sie bleiben deutlich unter dem Niveau vor der COVID-19-Krise. Dar\u00fcber hinaus ist die Erholung mit vielen Risiken verbunden.<\/li><li>Regierungen und Zentralbanken haben umfangreiche Unterst\u00fctzungsprogramme durchgef\u00fchrt, die von 3,5% des BIP in Russland bis 23,5% des BIP in Tschechien reichen. <\/li><li>Die F\u00f6rderprogramme unterscheiden sich in Gr\u00f6\u00dfe, Umfang, Effizienz und Geschwindigkeit der Umsetzung. Diese Merkmale werden die Erholung im 2H20 und 2021 pr\u00e4gen.<\/li><li>Das gr\u00f6\u00dfte Risiko f\u00fcr die CEE-Volkswirtschaften ist eine zweite Pandemiewelle, auch wenn die Restriktionen nicht so streng ausfallen wie im M\u00e4rz-Mai 2020.<\/li><li>In EU-CEE1erwarten wir einen R\u00fcckgang des BIP um 8,3% im Jahr 2020 und ein Wachstum von 7,3% im Jahr 2021. Die Volkswirtschaften des Westbalkans k\u00f6nnten sich \u00e4hnlich entwickeln.<\/li><li>Russlands Wirtschaft d\u00fcrfte im Jahr 2020 um etwa 5,4% schrumpfen und im n\u00e4chsten Jahr wieder um 3,8% zulegen.<\/li><li>In der T\u00fcrkei k\u00f6nnte das BIP in diesem Jahr um etwa 5,6% sinken und 2021 um 6,6% wachsen.<\/li><li>Wir erwarten weitere Zinssenkungen in Tschechien, Rum\u00e4nien, Russland, Serbien und der T\u00fcrkei. Lediglich Tschechien und Polen k\u00f6nnten im Jahr 2021 eine Zinserh\u00f6hung in Betracht ziehen.<\/li><li>Die Inflationsziele d\u00fcrften in den Jahren 2020-21 erreicht werden, k\u00f6nnten aber anschlie\u00dfend in Gefahr geraten, wenn die Binnennachfrage wieder anzieht.<\/li><li>Unseren Modellen zufolge sind die CZK, der HUF und der PLN unterbewertet, aber schlechte Handelsdaten und eine volatile Risikobereitschaft k\u00f6nnen potenzielle Rallyes verk\u00fcrzen; der RUB, der RON und der RSD sind \u00fcberbewertet.<\/li><li>ROMGBs und ROMANI EUR bleiben unsere Top-Empfehlung in der Region, da das zuvor in den Anleihen eingepreiste Risiko einer Rating-Herabstufung weiter abnehmen k\u00f6nnte.<\/li><li>OFZs, POLGBs und langfristige CZGBs bieten attraktive Bewertungen, sind aber mit Wechselkursrisiken konfrontiert. <\/li><li>Die \u00b4Recovery and Resilience Facility\u00b4 der EU ist f\u00fcr die EU-CEE-L\u00e4nder von entscheidender Bedeutung, jedoch nicht in den n\u00e4chsten zw\u00f6lf Monaten. 1EU-CEE umfasst Bulgarien, Kroatien, Tschechien, Ungarn, Polen, Rum\u00e4nien, die Slowakei und Slowenien - alles CEE-L\u00e4nder, die Mitglieder der EU sind.<\/p><\/li><\/ul>","hash":"dd8458919e2def29e8ea8d8b7115a33882ddbeac5dc60029b411fff7da396cdb","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","limit":"1"}}]

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