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78f6c72b509229f3ef77a71224b9fc6b147da4ee04fe56b12377231eaa21e01d;;[{"layout":"detailed","uid":29021,"publicationDate":"05 Mar 23","emaObject":{"protectedFileLink":"https:\/\/www.research.unicredit.eu\/DocsKey\/economics_docs_2023_184716.ashx?EXT=pdf&KEY=C814QI31EjqIm_1zIJDBJGlpiFwyM1XC6LgFmyKYAmE=&T=1&T=1","protectedFileLinkDe":"","protectedFileLinkIt":""},"title":"Sunday Wrap","titleDe":"","titleIt":"","product":"Sunday Wrap","synopsis":"<ul class=\"ucrBullets\"><li> A higher and later peak in core inflation is likely to push the ECB to tighten beyond 3.50%. We have put our forecast for policy rates under revision; <\/li><li> The ECB is increasingly looking at the important role played by buoyant corporate profits in the post-pandemic inflation outbreak. While this might ease exaggerated fears of a wage-price spiral, it is unlikely to affect the trajectory of policy rates in the short term.<\/li><\/ul>","synopsisDe":"","synopsisIt":"","analysts":[{"first":"Marco","last":"Valli","link":"https:\/\/www.unicreditresearch.eu\/index.php?id=analyst&L=N3tsp4rk3rRef&tx_research_piedition%5Banalyst%5D=37&tx_research_piedition%5Baction%5D=analyst&tx_research_piedition%5Bcontroller%5D=Edition&cHash=dc3604fb61baa8c1a3f2aed1d2468de2"}],"hash":"78f6c72b509229f3ef77a71224b9fc6b147da4ee04fe56b12377231eaa21e01d","available":"0","settings":{"layout":"detailed","size":"default","showanalysts":"2","showcompanies":"2","showcountries":"2","showcurrencies":"2","nodate":"0","notitle":"0","noproduct":"0","noflags":"0","dateformat":"d M y","nolinktitle":"0","synopsislength":"300","synopsisexpand":"1","shownav":"0","oldestedition":"","limit":"5"}},{"layout":"detailed","uid":28971,"publicationDate":"19 Feb 23","emaObject":{"protectedFileLink":"https:\/\/www.research.unicredit.eu\/DocsKey\/economics_docs_2023_184651.ashx?EXT=pdf&KEY=C814QI31EjqIm_1zIJDBJKqnvtMyyPsZDkgCwBoMWN4=&T=1&T=1","protectedFileLinkDe":"","protectedFileLinkIt":""},"title":"Sunday Wrap","titleDe":"","titleIt":"","product":"Sunday Wrap","synopsis":"<p class=\"ucrIndent\"><p>Happy Sunday, This is Marco Valli from Milan, UniCredit\u00b4s Global Head of Research. With Erik off for a few weekends, today I want to share with you my thoughts on the challenges and opportunities Italy faces in an increasingly complex global and European landscape. I will do so with the support of a number of slides I presented this past week to an audience of MPs and members of institutions at a UniCredit event in Rome (with many thanks to Corriere della Sera\u00b4s Federico Fubini for his role of discussant and to Loredana Federico, our Chief Italian Economist, for her help with the charts). Link to the presentation slides: Italy: see pdf<\/p><\/p>","synopsisDe":"","synopsisIt":"","analysts":[{"first":"Marco","last":"Valli","link":"https:\/\/www.unicreditresearch.eu\/index.php?id=analyst&L=N3tsp4rk3rRef&tx_research_piedition%5Banalyst%5D=37&tx_research_piedition%5Baction%5D=analyst&tx_research_piedition%5Bcontroller%5D=Edition&cHash=dc3604fb61baa8c1a3f2aed1d2468de2"}],"countries":[{"name":"Italy","ticker":"IT","link":"https:\/\/www.unicreditresearch.eu\/index.php?id=country&L=N3tsp4rk3rRef&tx_research_piedition%5Bcountry%5D=5&tx_research_piedition%5Baction%5D=country&tx_research_piedition%5Bcontroller%5D=Edition&cHash=39d7224c0452f3251d42f8f8656acb2b"}]},{"layout":"detailed","uid":28914,"publicationDate":"03 Feb 23","emaObject":{"protectedFileLink":"https:\/\/www.research.unicredit.eu\/DocsKey\/economics_docs_2023_184567.ashx?EXT=pdf&KEY=C814QI31EjqIm_1zIJDBJPTZqM8tbM-R2bT3Rlhmh-M=&T=1&T=1","protectedFileLinkDe":"","protectedFileLinkIt":""},"title":"Chart of the Week - Mapping housing-market risk in the eurozone","titleDe":"","titleIt":"","product":"Chart of the Week","synopsis":"<ul class=\"ucrBullets\"><li> With the ECB on a steep tightening trajectory and the Bank Lending Survey for 4Q22 showing a substantial deterioration in demand for mortgages, the eurozone housing market deserves monitoring. Our Chart of the Week provides a simple heat map to spot potential vulnerabilities across countries. <\/li><li><strong> We focus on three variables: <\/strong> 1. a measure of affordability, which we proxy with a (normalized) ratio of house prices to disposable income; 2. a gauge of exposure to floating-rate mortgages, represented by the share of floating-rate new mortgages out of total new mortgages (over a five-year period); 3. an indicator of household indebtedness. While the combined message from these variables cannot cover the complexity of housing markets in the eurozone, we think it provides a reasonably good indication of where risks might lie. <\/li><li> The picture that emerges is one characterized by pockets of vulnerability, but no clear case for a severe downturn. In our sample of countries, Germany and Austria record the most stretched valuations, which, however, is mitigated by generally low household indebtedness and, in the case of Germany, low exposure to floating-rate mortgages. France and Spain do not display clear vulnerabilities, and risk seems to be rather contained in Italy amid low valuations and indebtedness. Finland features very high exposure to floating rates and elevated indebtedness, but the lowest valuation-to-income ratio in our sample.<\/li><li> These indications should be taken with a pinch of salt, as several other factors contribute to determining the vulnerability of housing markets to rising rates and tighter financial conditions. Among these factors, we point out the speed of change in valuations and indebtedness in recent years (especially after the pandemic), loan-to-value and home-ownership ratios, the relative exposure to real estate of the low-income part of the population, the relevance of the buy-to-let market, the extent of government measures to support households during the energy crisis and the tax treatment of interest expenditure. <\/li><li> Overall, any correction in house prices across the eurozone would have implications for the economic outlook but is unlikely to have major effects on financial stability, also thanks to banks\u00b4 comfortable capital buffers.<\/li><\/ul>","synopsisDe":"","synopsisIt":"","analysts":[{"first":"Marco","last":"Valli","link":"https:\/\/www.unicreditresearch.eu\/index.php?id=analyst&L=N3tsp4rk3rRef&tx_research_piedition%5Banalyst%5D=37&tx_research_piedition%5Baction%5D=analyst&tx_research_piedition%5Bcontroller%5D=Edition&cHash=dc3604fb61baa8c1a3f2aed1d2468de2"}],"countries":[{"name":"Euroland","ticker":"","link":"https:\/\/www.unicreditresearch.eu\/index.php?id=country&L=N3tsp4rk3rRef&tx_research_piedition%5Bcountry%5D=25&tx_research_piedition%5Baction%5D=country&tx_research_piedition%5Bcontroller%5D=Edition&cHash=fd74dfc966e72d45ff2580813616e07a"}]},{"layout":"detailed","uid":28692,"publicationDate":"17 Nov 22","emaObject":{"protectedFileLink":"https:\/\/www.research.unicredit.eu\/DocsKey\/economics_docs_2022_184258.ashx?EXT=pdf&KEY=C814QI31EjqIm_1zIJDBJMFJK6gFt5Ic8ChzcuRXBYo=&T=1&T=1","protectedFileLinkDe":"https:\/\/www.research.unicredit.eu\/DocsKey\/economics_docs_2022_184376.ashx?EXT=pdf&KEY=C814QI31EjqIm_1zIJDBJPMscoAUz340J3iJ4yvVSQI=&T=1&T=1","protectedFileLinkIt":""},"title":"Macro & Markets 2023-24 Outlook: Go for carry as central banks approach peak rates","titleDe":"Macro & Markets 2023-24 Outlook - Nutzen Sie die Carry-Ertr\u00e4ge, w\u00e4hrend sich die Zentralbanken ihrem maximalen Leitzins n\u00e4hern","titleIt":"","product":"Macro & Markets","synopsis":"<p><ul class=\"ucrBullets\"><li><strong>Macro: <\/strong> We forecast a mild technical recession in both the US and the eurozone, followed by a below-trend recovery. Inflation is set to decelerate meaningfully in 2023. The Fed and the ECB are likely to finish their tightening cycle by early next year and to start cutting rates in 2024.<\/li><li><strong>FI: <\/strong> Long-dated yields are likely to be close to their peaks. Convincing signals that inflation is easing will give central banks a green light to rein in some of the recent tightening, leading to a bull market revival and curve steepening.<\/li><li><strong>FX: <\/strong> The USD is set to further loosen its grip, but its strength is unlikely to be fully reversed. By the end of our forecast horizon, we expect EUR-USD to climb to 1.10-1.12 and we see GBP-USD back above 1.20, USD-JPY below 135 and USD-CNY down to 6.90. We remain bearish on the CEE3 currencies, the TRY and the RUB.<\/li><li><strong>Equities: <\/strong> Following a volatile sideways movement early in the year, equities have potential to rise by about 10% in 2023, primarily supported by valuation expansion. Earnings growth should be flat and is unlikely to accelerate before 2024. Our 2023 year-end index targets are Euro STOXX 50 4200, DAX 15500 and S&amp;P 500 4300 index points.<\/li><li><strong>Credit: <\/strong> We expect a solid year in European credit - both in financials and non-financials - though spread tightening is likely to take place only in 2H23. Lower tiers of the capital structure and high yield are likely to outperform, mainly thanks to high carry. We prefer HY NFI and Bank AT1s over IG seniors.<\/li><li><strong>ESG: <\/strong> Greeniums are set to move sideways or richen moderately as strong demand for ESG assets outpaces new issuance. Policy initiatives and the transforming energy landscape will support interest in the asset class.<\/p><\/li><\/ul><p class=\"ucrIndent\"><p> <\/p><\/p><p class=\"ucrIndent\"><p> <\/p><\/p>","synopsisDe":"<p><ul class=\"ucrBullets\"><li><strong> Macro: <\/strong> Wir prognostizieren eine leichte technische Rezession sowohl in den USA als auch in der Eurozone, gefolgt von einer Erholung unterhalb des Trends. Die Inflation d\u00fcrfte sich 2023 deutlich verlangsamen. Die Fed und die EZB werden ihren Straffungszyklus wahrscheinlich Anfang n\u00e4chsten Jahres beenden und 2024 mit Zinssenkungen beginnen.<\/li><li><strong> FI: <\/strong> Die Renditen langfristiger Anleihen befinden sich vermutlich bereits in der N\u00e4he ihres H\u00f6chststands. \u00dcberzeugende Signale, dass die Inflation nachl\u00e4sst, werden den Zentralbanken gr\u00fcnes Licht geben, einen Teil der j\u00fcngsten Straffung zur\u00fcckzunehmen, was zu einer Wiederbelebung des Bullenmarktes und einer Versteilerung der Zinsstrukturkurve f\u00fchren k\u00f6nnte.<\/li><li><strong> FX: <\/strong> Der USD d\u00fcrfte sich weiter abschw\u00e4chen, aber seine St\u00e4rke wird sich wahrscheinlich nicht vollst\u00e4ndig umkehren. Bis zum Ende unseres Prognosehorizonts rechnen wir mit einem Anstieg des EUR-USD auf 1,10-1,12 und erwarten GBP-USD wieder \u00fcber 1,20, den USD-JPY unter 135 und eine Abw\u00e4rtsbewegung bei USD-CNY bis auf 6,90. F\u00fcr die CEE3-W\u00e4hrungen, die TRY und den RUB bleiben wir bearish.<\/li><li><strong> Equities: <\/strong> Nach einer volatilen Seitw\u00e4rtsbewegung zu Beginn des Jahres haben Aktien im Jahr 2023 ein Aufw\u00e4rtspotenzial von rund 10%, was in erster Linie auf eine Ausweitung der Bewertungen zur\u00fcckzuf\u00fchren sein d\u00fcrfte. Das Gewinnwachstum bleibt voraussichtlich sehr niedrig und wird sich vor 2024 kaum beschleunigen. Unsere Indexziele zum Jahresende 2023 liegen f\u00fcr den Euro STOXX 50 bei 4200, f\u00fcr den DAX bei 15500 und f\u00fcr den S&amp;P 500 bei 4300 Indexpunkten.<\/li><li><strong> Credit: <\/strong> Wir erwarten ein solides Jahr f\u00fcr europ\u00e4ische Unternehmensanleihen - sowohl im Finanz- als auch im Nicht-Finanzsektor -, auch wenn die Spread-Einengung wahrscheinlich erst in 2H23 stattfinden wird. Die unteren Ebenen der Kapitalstruktur und High-Yield Anleihen k\u00f6nnten eine Outperformance zeigen, vor allem dank der hohen Carry-Ertr\u00e4ge. Wir bevorzugen High-Yield NFI- und Bank AT1-Anleihen gegen\u00fcber IG Seniors.<\/li><li><strong> ESG: <\/strong> Die Pr\u00e4mien f\u00fcr ESG-Anleihen d\u00fcrften sich seitw\u00e4rts bewegen oder moderat zulegen, da die starke Nachfrage nach ESG-Anlagen die Neuemissionen \u00fcbersteigt. Politische Initiativen und die sich wandelnde Energielandschaft werden das Interesse an der Anlageklasse f\u00f6rdern.<\/p><\/li><\/ul>","synopsisIt":""},{"layout":"detailed","uid":28673,"publicationDate":"11 Nov 22","emaObject":{"protectedFileLink":"https:\/\/www.research.unicredit.eu\/DocsKey\/economics_docs_2022_184231.ashx?EXT=pdf&KEY=C814QI31EjqIm_1zIJDBJMFJK6gFt5IcT-lUQpxjC7o=&T=1&T=1","protectedFileLinkDe":"","protectedFileLinkIt":""},"title":"Chart of the Week - Eurozone: lower vulnerability to higher rates this time, but...","titleDe":"","titleIt":"","product":"Chart of the Week","synopsis":"<p><ul class=\"ucrBullets\"><li>Our Chart of the Week compares net interest payments (defined as interest payments minus interest earnings) for the government, non-financial corporations (NFCs) and the household sector in the four largest eurozone countries, before both the ECB\u00b4s current hiking cycle and that of 2005-2008. Net interest payment reflects both the level of interest rates and the stock of interest-bearing assets and liabilities1. For the sake of comparability, we express net payments as a percentage of GDP.<\/li><li>The chart shows that, in general, eurozone countries are comparatively well positioned to face the current rate shock. In greater detail, net interest payments faced by governments is below that of 2005, thanks to a lower level of interest rates. Spain is the exception here, given that public debt as a share of GDP is now almost 120%, as opposed to 40-45% in 2005. The picture looks uniformly more favorable for the corporate sector, where net interest payments are much lower now than in 2005 (except in Germany, where there is little change). In the household sector, where interest-bearing assets typically exceed liabilities, the situation looks similar to that of 2005 with the exception of Italy. Here, reduced interest income reflects to a large extent the lower share of interest-bearing assets being held as Italian households\u00b4 portfolios have increasingly moved towards (typically more risky) non-interest-bearing assets.<\/li><li>While our chart suggests that rate hikes are likely to be manageable, we point out that cumulative monetary tightening this time around is very likely to end up being larger than that of 2005-2008, when the ECB increased its policy rate by a total of 225bp. Moreover, households are under huge pressure due to surging inflation and falling real income, which is especially affecting the most vulnerable part of the population. This will compound the impact on growth from higher rates.Notes:<\/li><li>We assume that the following financial instruments generate interest: deposits, debt securities and loans. In our analysis, we only consider households\u00b4 direct holdings of interest-bearing assets, while we do not take into account holdings through investment funds, pension funds and life-insurance schemes.<\/p><\/li><\/ul>","synopsisDe":"","synopsisIt":"","analysts":[{"first":"Marco","last":"Valli","link":"https:\/\/www.unicreditresearch.eu\/index.php?id=analyst&L=N3tsp4rk3rRef&tx_research_piedition%5Banalyst%5D=37&tx_research_piedition%5Baction%5D=analyst&tx_research_piedition%5Bcontroller%5D=Edition&cHash=dc3604fb61baa8c1a3f2aed1d2468de2"}],"countries":[{"name":"Euroland","ticker":"","link":"https:\/\/www.unicreditresearch.eu\/index.php?id=country&L=N3tsp4rk3rRef&tx_research_piedition%5Bcountry%5D=25&tx_research_piedition%5Baction%5D=country&tx_research_piedition%5Bcontroller%5D=Edition&cHash=fd74dfc966e72d45ff2580813616e07a"}]}]


Marco Valli
Global Head of Research
Chief European Economist
UniCredit Bank AG, Milan
Piazza Gae Aulenti, 4 - Tower C
I-20154 Milan
+39 02 8862-0537

Marco Valli is Global Head of Research and Chief European Economist at UniCredit. Previously, he served as Chief Eurozone Economist and Chief Italian Economist. Before joining UniCredit in 200...

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