e2fda6f48f4beb7f2e9a16bde35b727c4d7cd8e0d73c422d49e7378ade652268;;[{"layout":"linklist","uid":22490,"publicationDate":"29 May 14:07","emaObject":{"protectedFileLink":"https:\/\/www.research.unicredit.eu\/DocsKey\/economics_docs_2020_177001.ashx?EXT=pdf&KEY=C814QI31EjqIm_1zIJDBJCc1A_K5r6eeezER_Ps2knE=&T=1&T=1","protectedFileLinkDe":"","protectedFileLinkIt":""},"title":"Chart of the Week - Next Generation EU: Which eurozone countries benefit more?","product":"Chart of the Week","synopsis":"<ul class=\"ucrBullets\"><li> On Wednesday, the European Commission (EC) outlined its proposal for a recovery package that encompasses the new EU budget (the Multiannual Financial Framework, MFF) for 2021-27 and a recovery instrument labelled 'Next Generation EU'. This instrument, which is intended to be exceptional and temporary, would boost the MFF in 2021-24 and would be worth EUR 750bn (5.4% of EU27 2019 GDP). Our initial understanding was that two-thirds of Next Generation EU (i.e. EUR 500bn) would be distributed to member countries as grants, while the remaining one-third (EUR 250bn) would be loans. However, it is possible that grants handed out through Next Generation EU might be less than EUR 500bn, with the remaining funds to be allocated via the MFF. In any case, all grants would finance European-agreed policy priorities and, therefore, should not be seen as national budgetary support per se. The EC\u00b4s proposal would need to be approved unanimously by the EU Council; the more frugal countries are likely to push back, but we think that any significant watering down of the plan is unlikely.<\/li><li> Our Chart of the Week is an attempt to infer the size of the transfers within eurozone countries implied by Next Generation EU. Given that information available is incomplete, we have to make the following assumptions with regard to the distributions of grants by country, as well as the repayment of bonds that will finance Next Generation EU. <\/li><li> As far as we know, the EC has not published a full breakdown of grants by country. However, some numbers have circulated widely in the press and top EC officials have also mentioned them. Bloomberg has published a complete list of the by-country allocation of grants envisaged by the EC. We rely on the Bloomberg numbers and note that they do not sum up to EUR 500bn, but to slightly more than EUR 400bn. Bloomberg suggests that these numbers include all the separate programs of Next Generation EU, but not grants from the MFF, which are also subject to discussion.<\/li><li> Regarding the costs, we assume that each country will finance a share of Next Generation EU\u00b4s grant pool of about EUR\u00a0400bn based on the EC\u00b4s November 2019 proposal for national contributions and traditional own resources in the MFF 2021-27. We then compute the net balance as a percentage of each country\u00b4s 2019 GDP.<\/li><li> Unsurprisingly, the results indicate that resources will be transferred from the 'core' of the eurozone to southern and eastern eurozone countries. Proportionally, Greece stands to benefit the most, but Portugal and the Baltic countries also look set to do very well. Italy would get the largest amount of grants in absolute terms (EUR 82bn), although the net transfer does not appear huge in proportion to the size of the Italian economy (2% of GDP). <\/li><li> A similar exercise for other EU countries would show that the CEE region should remain very well supported. We estimate that Bulgaria and Croatia might even benefit proportionally more than Greece, with Romania receiving net transfers worth about 5.5% of GDP, Poland about 3.5-4% of GDP, Hungary about 2% of GDP, and Czechia about 1% of GDP.<\/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":22432,"publicationDate":"24 May 11:47","emaObject":{"protectedFileLink":"https:\/\/www.research.unicredit.eu\/DocsKey\/economics_docs_2020_176935.ashx?EXT=pdf&KEY=C814QI31EjqIm_1zIJDBJMEr-ZG04LJQL0oA0q21EsQ=&T=1","protectedFileLinkDe":"https:\/\/www.research.unicredit.eu\/DocsKey\/economics_docs_2020_176935.ashx?EXT=pdf&KEY=C814QI31EjqIm_1zIJDBJMEr-ZG04LJQL0oA0q21EsQ=&T=1","protectedFileLinkIt":"https:\/\/www.research.unicredit.eu\/DocsKey\/economics_docs_2020_176935.ashx?EXT=pdf&KEY=C814QI31EjqIm_1zIJDBJMEr-ZG04LJQL0oA0q21EsQ=&T=1"},"title":"Chief Economist\u00b4s Comment - Sunday Wrap","product":"Chief Economist's Comment","synopsis":"<p><ul class=\"ucrBullets\"><li> How wrong markets have been on Italy\u2019s financing capabilities, as illustrated by the enormous turnout by Italian savers for the new BTP-Italia issue.<\/p><\/li><\/ul><p><ul class=\"ucrBullets\"><li><strong> The Macron-Merkel Plan of EUR 500bn in grants: <\/strong> The money is important, but the wrapping is even more interesting. The plan represents a crossing of the Rubicon to a new European future.<\/p><\/li><\/ul>"},{"layout":"linklist","uid":22372,"publicationDate":"17 May 11:37","emaObject":{"protectedFileLink":"https:\/\/www.research.unicredit.eu\/DocsKey\/economics_docs_2020_176869.ashx?EXT=pdf&KEY=C814QI31EjqIm_1zIJDBJJXOzNvIEMgZ5tRPMasKQgk=&T=1","protectedFileLinkDe":"https:\/\/www.research.unicredit.eu\/DocsKey\/economics_docs_2020_176869.ashx?EXT=pdf&KEY=C814QI31EjqIm_1zIJDBJJXOzNvIEMgZ5tRPMasKQgk=&T=1","protectedFileLinkIt":"https:\/\/www.research.unicredit.eu\/DocsKey\/economics_docs_2020_176869.ashx?EXT=pdf&KEY=C814QI31EjqIm_1zIJDBJJXOzNvIEMgZ5tRPMasKQgk=&T=1"},"title":"Chief Economist\u00b4s Comment - Sunday Wrap","product":"Chief Economist's Comment","synopsis":"<ul class=\"ucrBullets\"><li> Today\u2019s note will be all about Berlin\u2019s massive dilemma and how I see the way through the first hurdle, while the bigger issue remains somewhat more complicated. The stakes couldn\u2019t be higher \u2013 for Germany, and for Europe.<\/li><\/ul>"},{"layout":"linklist","uid":22356,"publicationDate":"14 May 15:09","emaObject":{"protectedFileLink":"https:\/\/www.research.unicredit.eu\/DocsKey\/economics_docs_2020_176852.ashx?EXT=pdf&KEY=C814QI31EjqIm_1zIJDBJJXOzNvIEMgZ7I54iiR-v94=&T=1","protectedFileLinkDe":"https:\/\/www.research.unicredit.eu\/DocsKey\/economics_docs_2020_176860.ashx?EXT=pdf&KEY=C814QI31EjqIm_1zIJDBJJXOzNvIEMgZ0jv6u5nVX7Y=&T=1","protectedFileLinkIt":"https:\/\/www.research.unicredit.eu\/DocsKey\/economics_docs_2020_176862.ashx?EXT=pdf&KEY=C814QI31EjqIm_1zIJDBJJXOzNvIEMgZU49yya6wUvc=&T=1"},"title":"Oil Update - COVID-19 derails investment plans ","product":"Oil Update","synopsis":"<ul class=\"ucrBullets\"><li> May is expected to mark the beginning of a slow normalization process for the oil industry that should bring some price relief as governments gradually lift their lockdowns and OPEC+ begins to cut production \u2013 although differences in local storage capacity across the world might widen spreads between benchmarks and fuel price volatility.<\/li><\/ul><ul class=\"ucrBullets\"><li> The COVID-19 crisis is likely to leave lasting scars, with oil majors and smaller producers being forced to radically scale down their capex projects.<\/li><\/ul><ul class=\"ucrBullets\"><li> In the medium term, given project lead times and field declines, today\u2019s forgone investment plans will have a negative impact on supply and will put upward pressures on prices.<\/li><\/ul>"},{"layout":"linklist","uid":22352,"publicationDate":"14 May 9:03","emaObject":{"protectedFileLink":"https:\/\/www.research.unicredit.eu\/DocsKey\/economics_docs_2020_176847.ashx?EXT=pdf&KEY=C814QI31EjqIm_1zIJDBJJXOzNvIEMgZ7B4nr1mGTR8=&T=1","protectedFileLinkDe":"","protectedFileLinkIt":""},"title":"Chart of the Week - France: it will be difficult to avoid a 20-25% GDP contraction in 2Q20","product":"Chart of the Week","synopsis":"<ul class=\"ucrBullets\"><li> Since the state of emergency was announced in mid-March, INSEE, the French national statistical agency, has regularly published bi-monthly updates of the impact of the COVID-19 outbreak on French economic activity. These updates are particularly valuable as they track overall GDP virtually in real time. Each update covers the two weeks up to publication date; the first update was published on 26 March, the latest on 7 May. The methodology developed by INSEE is based on different high-frequency data (i.e. payment statistics, road traffic data, electricity data) than the usual ones (i.e. survey based), whose collection has been significantly disrupted by containment measures.<\/li><\/ul><ul class=\"ucrBullets\"><li> Our Chart of the Week shows the evolution of French GDP in 1H20. It reflects the 1Q GDP report (-5.8% qoq, the largest contraction since the start of the series in 1949) as well as INSEE\u2019s bi-monthly updates. In its first update at the end of March, INSEE reported that the lockdown had cut economic activity by a third, compared to a normal level (which in the chart we set equal to 100). In the 7 May update, economic activity was still reported around 33% lower than normal before France began gradually lifting containment measures on Monday this week.<\/li><\/ul><ul class=\"ucrBullets\"><li> In order to illustrate the implications of such a deep trough in activity for the GDP performance in 2Q20, we consider three scenarios for the recovery path in economic activity as the lockdown is gradually lifted. The first scenario (the black line) is very optimistic as it assumes that economic activity swiftly returns to normal levels at the end of June. The probability of this happening is very low but, even in this scenario, GDP would still contract by about 17% qoq in 2Q20. The second scenario (the red line) envisages a recovery to 90% of normal economic activity at the end of June and is consistent with a GDP contraction of slightly more than 20% qoq. In the third scenario (the grey line), activity recovers more slowly, reaching 80% of a normal level, consistent with a quarterly GDP contraction of about 25%. <\/li><\/ul><ul class=\"ucrBullets\"><li> All in all, our chart shows that the economic downturn will intensify significantly in the second quarter, with GDP likely to contract by 20-25% qoq. This is broadly in line with our current forecast, but indicates that consensus is still far too optimistic.<\/li><\/ul>"},{"layout":"linklist","uid":22303,"publicationDate":"10 May 12:43","emaObject":{"protectedFileLink":"https:\/\/www.research.unicredit.eu\/DocsKey\/economics_docs_2020_176795.ashx?EXT=pdf&KEY=C814QI31EjqIm_1zIJDBJNJHb2_uy3HBLCMi46apbYE=&T=1","protectedFileLinkDe":"https:\/\/www.research.unicredit.eu\/DocsKey\/economics_docs_2020_176795.ashx?EXT=pdf&KEY=C814QI31EjqIm_1zIJDBJNJHb2_uy3HBLCMi46apbYE=&T=1&T=1","protectedFileLinkIt":"https:\/\/www.research.unicredit.eu\/DocsKey\/economics_docs_2020_176795.ashx?EXT=pdf&KEY=C814QI31EjqIm_1zIJDBJNJHb2_uy3HBLCMi46apbYE=&T=1&T=1"},"title":"Chief Economist\u00b4s Comment - Sunday Wrap","product":"Chief Economist's Comment","synopsis":"<ul class=\"ucrBullets\"><li> Our \u201cmost-bearish-in-class\u201d forecast for 2020 GDP (in both Europe and the US) still look right to me, but the emerging narrative of terrible long-term impacts of the crisis on growth is overdone.<\/li><\/ul><ul class=\"ucrBullets\"><li> The German Constitutional Court\u2019s ruling on the ECB\u2019s QE is flawed both in terms of economics and (I dare say) legally. It will not derail ECB policies, but the Court is an important institution and Germany needs to (and will) manage this carefully.<\/li><\/ul>"},{"layout":"linklist","uid":22264,"publicationDate":"06 May 7:34","emaObject":{"protectedFileLink":"https:\/\/www.research.unicredit.eu\/DocsKey\/economics_docs_2020_176753.ashx?EXT=pdf&KEY=C814QI31EjqIm_1zIJDBJNJHb2_uy3HB-49ssPwx2LY=&T=1","protectedFileLinkDe":"","protectedFileLinkIt":""},"title":"Chart of the Week - Italy: Unemployment decline reflects inactivity increase during lockdown","product":"Chart of the Week","synopsis":"<ul class=\"ucrBullets\"><li> Our Chart of the Week shows that the sizeable decrease in Italy\u2019s unemployment rate (UR) in March \u2013 when Italy and other eurozone countries intensified restrictions to contain the spread of COVID-19 \u2013 stood in contrast to what happened in the rest of the eurozone. Italy\u2019s unemployment rate declined by 0.9pp, from 9.3% in February to 8.4%. The UR for the whole euro area was up by 0.1pp to 7.4%, while it increased sizably in some of the largest euro area countries, such as Spain (+0.9pp, from 13.6% to 14.5%) and France (+0.5pp, from 7.9% to 8.4%).<\/li><\/ul><ul class=\"ucrBullets\"><li> The exceptional decline in Italy\u2019s UR was driven by a sizeable reduction in unemployment (-267k), which was associated with a huge increase (+296k) in the number of people moving to inactivity. This is the largest such monthly change in 16 years (when this time series was begun). Job shedding was contained overall, as employment declined by 27k.<\/li><\/ul><ul class=\"ucrBullets\"><li> The unemployed are generally defined as those persons who are without work when the survey is being taken, are available to start work within the following two weeks and have actively been looking for a job at some time during the preceding four weeks. People neither employed nor unemployed are considered inactive. In this case, one could reasonably assume that many people interrupted their job searches when the lockdown began in Italy at the end of February and entered inactivity. Moreover, for many people, it became difficult to start a new job. The reduction in the incentive to look for work (or to start it) was most probably explained by increasing difficulties as a result of the lockdown and a decrease in confidence in being able to find a job due to the continuing deterioration of the economic environment. Italy\u2019s consumer-confidence survey showed that the index of unemployment expectations increased swiftly in March, up from 36.8 to 68.0. This was also its largest monthly change since records began.<\/li><\/ul><ul class=\"ucrBullets\"><li> The divergence between Italy and the eurozone observed in March is unlikely to last. First, an increase in inactivity will likely also be observed in the other eurozone countries where lockdowns started later than in Italy and an increase in the index of consumers\u2019 unemployment expectations became more visible in April. Second, we expect to see the collapse in economic activity in Italy to be translated into an ongoing decline in employment in the coming months. That said, an increase in the recourse of temporary lay-off and wage support schemes and other measures adopted by the Italian government to support workers are expected to mitigate the overall effect that the slump in GDP and decline in labor demand will have on headcount employment and therefore on the increase in Italy\u2019s unemployment rate.<\/li><\/ul>"},{"layout":"linklist","uid":22234,"publicationDate":"03 May 11:11","emaObject":{"protectedFileLink":"https:\/\/www.research.unicredit.eu\/DocsKey\/economics_docs_2020_176723.ashx?EXT=pdf&KEY=C814QI31EjqIm_1zIJDBJNJHb2_uy3HBETBubwAP0sg=&T=1","protectedFileLinkDe":"https:\/\/www.research.unicredit.eu\/DocsKey\/economics_docs_2020_176723.ashx?EXT=pdf&KEY=C814QI31EjqIm_1zIJDBJNJHb2_uy3HBETBubwAP0sg=&T=1","protectedFileLinkIt":"https:\/\/www.research.unicredit.eu\/DocsKey\/economics_docs_2020_176723.ashx?EXT=pdf&KEY=C814QI31EjqIm_1zIJDBJNJHb2_uy3HBETBubwAP0sg=&T=1"},"title":"Chief Economist\u00b4s Comment - Sunday Wrap","product":"Chief Economist's Comment","synopsis":"<ul class=\"ucrBullets\"><li> It\u2019s too early to buy the growth-resumption story. We are probably not through the trough yet, and the implications on activity and earnings of this pandemic will almost certainly be longer than generally assumed.<\/li><\/ul><ul class=\"ucrBullets\"><li> While major central banks are doing an amazing job, still more will be needed from the fiscal side to get decent growth and earnings back.<\/li><\/ul><ul class=\"ucrBullets\"><li> In Europe, further challenges are now arriving because the usual race to the bottom among the credit rating agencies has begun. This highlights - again - the rating agencies\u2019 outsized, policy-mandated, role in asset allocation.<\/li><\/ul><ul class=\"ucrBullets\"><li> On Tuesday, we\u2019ll learn the outcome of the German Constitutional Court\u2019s ruling on the ECB\u2019s Public Sector Purchase Program (aka QE). I\u2019m convinced they\u2019ll rule in favor of the ECB, but if I were to be wrong, mayhem of a previously unseen scale will descend on Europe and the world.<\/li><\/ul>"},{"layout":"linklist","uid":22198,"publicationDate":"28 Apr 13:19","emaObject":{"protectedFileLink":"https:\/\/www.research.unicredit.eu\/DocsKey\/economics_docs_2020_176682.ashx?EXT=pdf&KEY=C814QI31EjqIm_1zIJDBJAOJm8sn-0N2qQxKvlGMxGU=&T=1","protectedFileLinkDe":"","protectedFileLinkIt":""},"title":"Chart of the Week - Eurozone banks brace for higher loan demand from firms, weaker demand from households","product":"Chart of the Week","synopsis":"<ul class=\"ucrBullets\"><li> Our Chart of the Week shows one of the most interesting developments revealed by the ECB\u2019s Bank Lending Survey for the first quarter. The survey, which was published today, was conducted between 19 March and 3 April 2020 and, therefore, provides a timely picture of eurozone banks\u2019 initial response to the COVID-19 crisis.<\/li><\/ul><ul class=\"ucrBullets\"><li> Banks reported a large increase in firms' loan demand in the first quarter, clearly driven by the liquidity squeeze caused by the economic shock. Our chart shows that banks expect a further significant rise in firms\u2019 loan demand in the current quarter (red line), to the highest net percentage since the beginning of the survey. The main factor underlying firms\u2019 loan demand in the first quarter was financing needs for inventories and working capital, while financing needs for fixed investment deteriorated significantly. This pattern is likely to strengthen in the second quarter as the GDP contraction intensifies.<\/li><\/ul><ul class=\"ucrBullets\"><li> In contrast, banks expect a strong deterioration in household demand for mortgages in the second quarter, to a net percentage comparable to that recorded in 2H08. The black line shows this. <\/li><\/ul><ul class=\"ucrBullets\"><li> The survey also provided valuable information on credit standards, and here the message is clearly positive. Despite the severity of the shock, the tightening of credit standards for corporate loans in the first quarter was contained, far milder than during the credit and sovereign debt crises. Moreover, the pace of increase of the rejection rate for loans to firms remained broadly similar to that of the previous quarter. This indicates that banks regard ECB and government support measures as effective backstops. Their strong capital position entering the crisis also helped. Banks even expect to ease considerably their credit standards for firms\u2019 financing in the second quarter, while they predict further tightening for household lending. <\/li><\/ul><ul class=\"ucrBullets\"><li> A final note of caution. The ECB reported a high dispersion of responses, which signals heightened uncertainty among banks as they are not yet able to fully evaluate the effects of the pandemic. Moreover, developments in loan demand for the first quarter were heterogeneous across the main eurozone countries. While firms\u2019 loan demand increased considerably in Germany and France, it declined in Spain and remained unchanged in Italy. For housing loans, demand continued to rise in Germany and France, while it decreased in Italy and Spain.<\/li><\/ul>"},{"layout":"linklist","uid":22173,"publicationDate":"26 Apr 11:25","emaObject":{"protectedFileLink":"https:\/\/www.research.unicredit.eu\/DocsKey\/economics_docs_2020_176654.ashx?EXT=pdf&KEY=C814QI31EjqIm_1zIJDBJAOJm8sn-0N2HWv-UfcrvJk=&T=1","protectedFileLinkDe":"https:\/\/www.research.unicredit.eu\/DocsKey\/economics_docs_2020_176654.ashx?EXT=pdf&KEY=C814QI31EjqIm_1zIJDBJAOJm8sn-0N2HWv-UfcrvJk=&T=1","protectedFileLinkIt":"https:\/\/www.research.unicredit.eu\/DocsKey\/economics_docs_2020_176654.ashx?EXT=pdf&KEY=C814QI31EjqIm_1zIJDBJAOJm8sn-0N2HWv-UfcrvJk=&T=1"},"title":"Chief Economist\u00b4s Comment - Sunday Wrap","product":"Chief Economist's Comment","synopsis":"<ul class=\"ucrBullets\"><li> The impression of lack of political leadership and policy coordination. The difference between headlines and reality - in Europe and the world at large.<\/li><\/ul><ul class=\"ucrBullets\"><li> The misguided focus on European solidarity. A lot is actually happening.<\/li><\/ul><ul class=\"ucrBullets\"><li> The mistaken narrative of debt sustainability.<\/li><\/ul>"},{"layout":"linklist","uid":22135,"publicationDate":"22 Apr 7:23","emaObject":{"protectedFileLink":"https:\/\/www.research.unicredit.eu\/DocsKey\/economics_docs_2020_176613.ashx?EXT=pdf&KEY=C814QI31EjqIm_1zIJDBJAOJm8sn-0N2xIccaXGPMSI=&T=1","protectedFileLinkDe":"","protectedFileLinkIt":""},"title":"Chart of the Week - Truck index points to double-digit decline in German GDP","product":"Chart of the Week","synopsis":"<ul class=\"ucrBullets\"><li> A steep decline in economic activity has become a virtual certainty in a multitude of countries. However, observers have been poking around in the dark about how massive the shock to GDP could be. <\/li><\/ul><ul class=\"ucrBullets\"><li> A timely available but largely unknown indicator for the German economy brings some light into the darkness: the truck-toll-mileage index. As of mid-April (average between 1-16 April), shrinking GDP of about 12% qoq in the second quarter has been signaled. <\/li><\/ul><ul class=\"ucrBullets\"><li> The basic idea of the truck-toll-mileage index is straightforward. The lower the need for transportation services, the steeper the decline in real GDP. In the past, this simple relationship worked pretty well. <\/li><\/ul><ul class=\"ucrBullets\"><li> It remains to be seen whether the first gradual lifting of restrictions is already easing the pressure on economic activity. The truck-toll-mileage index is available on a daily basis and enables a timely reality check for Germany. Further details and data can be found on the home page of the Federal Statistical Office. <\/li><\/ul>"},{"layout":"linklist","uid":22107,"publicationDate":"19 Apr 11:59","emaObject":{"protectedFileLink":"https:\/\/www.research.unicredit.eu\/DocsKey\/economics_docs_2020_176583.ashx?EXT=pdf&KEY=C814QI31EjqIm_1zIJDBJHZGZVz39fNBw0FXNsbdMoo=&T=1","protectedFileLinkDe":"https:\/\/www.research.unicredit.eu\/DocsKey\/economics_docs_2020_176583.ashx?EXT=pdf&KEY=C814QI31EjqIm_1zIJDBJHZGZVz39fNBw0FXNsbdMoo=&T=1","protectedFileLinkIt":"https:\/\/www.research.unicredit.eu\/DocsKey\/economics_docs_2020_176583.ashx?EXT=pdf&KEY=C814QI31EjqIm_1zIJDBJHZGZVz39fNBw0FXNsbdMoo=&T=1"},"title":"Chief Economist\u00b4s Comment - Sunday Wrap","product":"Chief Economist's Comment","synopsis":"<ul class=\"ucrBullets\"><li> I\u2019ll summarize why I think our deeper contraction this year is more likely than the IMF\u2019s shallower one.<\/li><\/ul><ul class=\"ucrBullets\"><li> I\u2019ll argue that while the policy response has been impressive, it\u2019s still insufficient. In particular, the banking system has been part of the solution so far, but without further policy action, it could soon be-come part of the problem. And in Southern Europe, the fiscal response as presently articulated is inade-quate.<\/li><\/ul><ul class=\"ucrBullets\"><li> Part of the reason for the meagre policy response in Southern Europe is an obsession with sovereign debt levels, which has led to the plea for help from the stronger economies in Northern Europe. Unfortunately, this European debate has become lost in the political quagmire of common debt. I\u2019ll list the five key questions which were not even asked, let alone answered, before we got in to this mess of mutual debt or not.<\/li><\/ul><ul class=\"ucrBullets\"><li> Finally, I\u2019ll summarize my suggested \u201c4 component\u201d way through all this.<\/li><\/ul>"}]

b05a4e111fbeaaaeef99f1f0b3cbbd8360267e2c999b128c8177a02b3a30db3d;;[{"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>","hash":"b05a4e111fbeaaaeef99f1f0b3cbbd8360267e2c999b128c8177a02b3a30db3d","available":"0","settings":{"layout":"linklist","size":"default","showanalysts":"-1","showcompanies":"-1","synopsislength":"-1","showcountries":"-1","showcurrencies":"-1","synopsisexpand":"0","nodate":"0","nolinktitle":"0","notitle":"0","dateformat":"d M G:i","noproduct":"0","noflags":"0","shownav":"0","limit":"2"}},{"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>"}]

4764309121d17ac959e566be5870479f3344cae6aaf33bf719ed8f2b942fc66c;;[{"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":"4764309121d17ac959e566be5870479f3344cae6aaf33bf719ed8f2b942fc66c","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":"2"}},{"layout":"linklist","uid":22027,"publicationDate":"23 Apr 6:38","emaObject":{"protectedFileLink":"\/fileadmin\/Presentations_ex_Marketingpraesi\/23_APRIL_2020_Update_from_UniCredit_Research_4_3.pdf","protectedFileLinkDe":"","protectedFileLinkIt":""},"title":"Presentation - The world after the crisis: Questions on debt and growth","product":"Presentation","synopsis":""}]

6f2687b24a7d1a91e797c5197445af2fe195886cc1eea1dd42b1d798e526a8f8;;[{"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":"6f2687b24a7d1a91e797c5197445af2fe195886cc1eea1dd42b1d798e526a8f8","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":"3"}},{"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>"},{"layout":"linklist","uid":16864,"publicationDate":"16 Oct 15:13","emaObject":{"protectedFileLink":"https:\/\/www.research.unicredit.eu\/DocsKey\/fxfistrategy_docs_2018_167502.ashx?EXT=pdf&KEY=KZGTuQCn4lsvclJnUgseVGkpNcRXR5-WSNJaYLqOUxTLwVp06M6wCw==&T=1","protectedFileLinkDe":"http:\/\/unicredit-globalresearch.application.hypovereinsbank.de\/Docs\/fxfistrategy_docs_2018_167654.pdf.ashx&T=1","protectedFileLinkIt":""},"title":"Shortened version of the Euro Credit Pilot (October 2018)","product":"Euro Credit Pilot - Strategy","synopsis":"<p class=\"ucrIndent\"><p><em>This is a shortened version of the Euro Credit Pilot, which we deem to be an acceptable minor non-monetary benefit under MiFID II.<\/em><\/p><\/p><p><ul class=\"ucrBullets\"><li> Corporate credit spread performance has shown some interesting divergence between synthetics and cash bonds. In synthetics, credit risk premiums have drifted wider over the last two weeks. The iTraxx Main traded at around 68bp from the time of the roll into the new series 30 until early October but has widened to around 75bp recently. For the iTraxx Crossover, widening has been more pronounced, as the index spread has increased by 30bp since the last roll to almost 300bp.<\/p><\/li><\/ul><p><ul class=\"ucrBullets\"><li> Cash bond spreads, however, have remained more stable. In IG-rated non-financials, spreads even tightened somewhat as the ECB increased again its purchases of corporate bonds in September after the end of the summer break.<\/p><\/li><\/ul><p><ul class=\"ucrBullets\"><li> However, Italian credit has underperformed its European peers over the last few weeks, as rising BTP yields have resulted in widening credit spreads. The spreads of Italian non-financial debt is trading at 100bp on average, compared to 35bp for the debt of German and French companies and 55bp for the debt of Spanish firms. However, while the yields of Italian financial debt have become more aligned with that of BTPs, the yield on non-financial debt has risen only gradually. Rating pressure is one of the biggest risk factors facing Italian credit. Nevertheless, substantial downgrade risk is already discounted in current spread valuations.<\/p><\/li><\/ul>"}]

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