Monthly data were mixed in Europe, in Asia and in the US. 2Q 2015 starts with considerable uncertainty over the pace of global economic growth: central banks maintain an accommodative stance and their future decisions will be data-dependent…<\/p>\n
<\/p>\n
Sign up for our free newsletter to receive weekly news from BONDWorld. Click here to register for your free copy<\/strong><\/span><\/a> <\/strong><\/span><\/a><\/span><\/p>\n Intesa Sanpaolo – Research Department For professional investors and advisers only<\/strong><\/p>\n – In the euro area, the April round of business surveys was mixed. The week opened with a drop the ZEW expectations index in Germany (53.3 from 54.8), against forecasts for a rise. Then, the composite PMI slipped back to 53.5 from a previous 54.0, on the back of a slowdown in Germany (54.2 to 55.4) and France (50.2 to 51.5). Towards the end of the week, the IFO index rose to 108.6, the highest reading in 10 months, partly dissipating concerns on the health of the euro area and German economies. Surveys’ details were again mixed. The PMI surveys hinted at a weaker activity both in services and manufacturing, while the IFO survey showed an improvement of morale in manufacturing but a decline in services. While the PMIs reported a worsening in both the new orders (51.8 from 52.7) and current production (53.1 to 53.6) indices, the IFO and ZEW showed a marked improvement of current conditions but a modest decline in expectations. Our reading of the April surveys is that the recovery is proceeding both in Germany and in the euro area, but some clouds are gathering over the outlook for the coming months; however there should be enough cyclical tailwinds to support the euro area cycle in the Spring. From May onwards, manufacturing activity should benefit more decisively from the depreciation of the euro, which accelerated in early 2015, and in general from more favorable financial conditions. <\/p>\n – The international political situation does not help, starting with Greece. Friday the Eurogroup took a tough stance, rejecting both the partial release of funds, and the start of a discussion on the third program before the end of the second. It is now up to the Greek Government to choose the lesser evil. –<\/p>\n – In Asia, the Markit Japan manufacturing PMI weakened to 49.7 in April, marking the third consecutive correction and returning below the 50-point threshold for the first time since May 2014. Improving sales prices and employment, despite a slowdown in orders and output, should signal that the slowdown in activity is perceived as transitory, and could be affected by weak US growth in 1Q. A positive signal, on the other hand, came from the trade balance, which showed a larger surplus than estimated, driven by a sharp rebound in exports in March, after several months of significant weakness. Weak data in China (manufacturing PMI down in April to 49.2 from 49.6), however, represent a risk factor for Asian growth in 2Q 2015. <\/p>\n – In the United States, by contrast, data releases are surprising more on the upside than on the downside. The surprise index has been rising gradually since it bottomed out in mid-March, outlining stronger than expected indications from the housing market, households’ confidence, the Philly Fed, and inflation, even though the flash PMI index corrected in April. Next week’s economic data releases are expected to be mixed. Confidence in the US recovery staying on track could be weakened by1Q GDP data, that will show a setback in the growth trend, due to a mix of factors. Weather conditions and disruption of activity in the ports of the Pacific Coast will have transitory negative effects on consumption, residential housing, inventories, and trade flows: these items, however, are all expected to rebound starting in 2Q, as they did in 1H 2014. The strong dollar and weak oil prices will represent important drags on corporate investments, and will persist into the coming quarters. Although weakness in 1Q casts uncertainty over the pace of the recovery, we stick to our forecast for underlying growth of around 3%, although the slowdown at the beginning of the year prompts us to revise year-on-year growth in 2015 to 2.8%. The exchange rate should subtract around 0.5 pp, an effect which, nonetheless, should be to a large extent balanced by the supportive effects of low gasoline prices on the real income of households. The other data releases due out in the US next week (ISM, construction, auto sales, personal spending) should confirm the picture of a recovery held back in the short term mostly by transitory factors, despite the presence of more lasting headwinds (namely the dollar), At its meeting of 28-29 April the FOMC will probably acknowledge these “mixed” elements and signal a wait-and-see stance, ahead of fresh data which will be crucial to assess the evolution of the outlook (see leading article).<\/p>\n <\/p>\n Appendix Important Disclosures<\/strong> Source: BONDWorld.co.uk<\/p>\n","protected":false},"excerpt":{"rendered":" Monthly data were mixed in Europe, in Asia and in the US. 2Q 2015 starts with considerable uncertainty over the pace of global economic growth: central banks maintain an accommodative stance and their future decisions will be data-dependent…<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"telegram_tosend":false,"telegram_tosend_message":"","telegram_tosend_target":0,"footnotes":"","_wpscp_schedule_draft_date":"","_wpscp_schedule_republish_date":"","_wpscppro_advance_schedule":false,"_wpscppro_advance_schedule_date":"","_wpscppro_dont_share_socialmedia":false,"_wpscppro_custom_social_share_image":0,"_facebook_share_type":"","_twitter_share_type":"","_linkedin_share_type":"","_pinterest_share_type":"","_linkedin_share_type_page":"","_instagram_share_type":"","_medium_share_type":"","_threads_share_type":"","_google_business_share_type":"","_selected_social_profile":[],"_wpsp_enable_custom_social_template":false,"_wpsp_social_scheduling":{"enabled":false,"datetime":null,"platforms":[],"status":"template_only","dateOption":"today","timeOption":"now","customDays":"","customHours":"","customDate":"","customTime":"","schedulingType":"absolute"},"_wpsp_active_default_template":true},"categories":[50],"tags":[],"class_list":["post-1608","post","type-post","status-publish","format-standard","hentry","category-weekly-analysis"],"blocksy_meta":{"styles_descriptor":{"styles":{"desktop":"","tablet":"","mobile":""},"google_fonts":[],"version":6}},"_links":{"self":[{"href":"https:\/\/www.investmentworld.eu\/ch\/wp-json\/wp\/v2\/posts\/1608","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmentworld.eu\/ch\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmentworld.eu\/ch\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmentworld.eu\/ch\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmentworld.eu\/ch\/wp-json\/wp\/v2\/comments?post=1608"}],"version-history":[{"count":0,"href":"https:\/\/www.investmentworld.eu\/ch\/wp-json\/wp\/v2\/posts\/1608\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmentworld.eu\/ch\/wp-json\/wp\/v2\/media?parent=1608"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmentworld.eu\/ch\/wp-json\/wp\/v2\/categories?post=1608"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmentworld.eu\/ch\/wp-json\/wp\/v2\/tags?post=1608"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
\n
\n
\n
Analyst Certification<\/strong>
The financial analysts who prepared this report, and whose names and roles appear on the first page, certify that: (1) The views expressed on companies mentioned herein accurately reflect independent, fair and balanced personal views; (2) No direct or indirect compensation has been or will be received in exchange for any views expressed. Specific disclosures: The analysts who prepared this report do not receive bonuses, salaries, or any other form of compensation that is based upon specific investment banking transactions.<\/p>\n
This research has been prepared by Intesa Sanpaolo S.p.A. and distributed by Banca IMI S.p.A. Milan, Banca IMI SpA-London Branch (a member of the London Stock Exchange) and Banca IMI Securities Corp (a member of the NYSE and NASD). Intesa Sanpaolo S.p.A. accepts full responsibility for the contents of this report. Please also note that Intesa Sanpaolo S.p.A. reserves the right to issue this document to its own clients. Banca IMI S.p.A. and Intesa Sanpaolo S.p.A. are both part of the Gruppo Intesa Sanpaolo. Intesa Sanpaolo S.p.A. and Banca IMI S.p.A. are both authorised by the Banca d’Italia, are both regulated by the Financial Services Authority in the conduct of designated investment business in the UK and by the SEC for the conduct of US business.
Opinions and estimates in this research are as at the date of this material and are subject to change without notice to the recipient. Information and opinions have been obtained from sources believed to be reliable, but no representation or warranty is made as to their accuracy or correctness. Past performance is not a guarantee of future results. The investments and strategies discussed in this research may not be suitable for all investors. If you are in any doubt you should consult your investment advisor.
This report has been prepared solely for information purposes and is not intended as an offer or solicitation with respect to the purchase or sale of any financial products. It should not be regarded as a substitute for the exercise of the recipient’s own judgement.
No Intesa Sanpaolo S.p.A. or Banca IMI S.p.A. entities accept any liability whatsoever for any direct, consequential or indirect loss arising from any use of material contained in this report.
This document may only be reproduced or published together with the name of Intesa Sanpaolo S.p.A. and Banca IMI S.p.A.. Intesa Sanpaolo S.p.A. and Banca IMI S.p.A. have in place a Joint Conflicts Management Policy for managing effectively the conflicts of interest which might affect the impartiality of all investment research which is held out, or where it is reasonable for the user to rely on the research, as being an impartial assessment of the value or prospects of its subject matter. A copy of this Policy is available to the recipient of this research upon making a written request to the Compliance Officer, Intesa Sanpaolo S.p.A., 90 Queen Street, London EC4N 1SA.
Intesa Sanpaolo S.p.A. has formalised a set of principles and procedures for dealing with conflicts of interest (“Research Policy”). The Research Policy is clearly explained in the relevant section of Banca IMI’s web site (www.bancaimi.com).
Member companies of the Intesa Sanpaolo Group, or their directors and\/or representatives and\/or employees and\/or members of their households, may have a long or short position in any securities mentioned at any time, and may make a purchase and\/or sale, or offer to make a purchase and\/or sale, of any of the securities from time to time in the open market or otherwise. Intesa Sanpaolo S.p.A. issues and circulates research to Qualified Institutional Investors in the USA only through Banca IMI Securities Corp., 245 Park Avenue, 35th floor, 10167 New York, NY,USA, Tel: (1) 212 326 1230. Residents in Italy: This document is intended for distribution only to professional investors as defined in art.31, Consob Regulation no. 11522 of 1.07.1998 either as a printed document and\/or in electronic form. Person and residents in the UK: This document is not for distribution in the United Kingdom to persons who would be defined as private customers under rules of the FSA.
US persons: This document is intended for distribution in the United States only to Qualified Institutional Investors as defined in Rule 144a of the Securities Act of 1933. US Customers wishing to effect a transaction should do so only by contacting a representative at Banca IMI Securities Corp. in the US (see contact details above).
Valuation Methodology<\/strong>
Trading Ideas are based on the market’s expectations, investors’ positioning and technical, quantitative or qualitative aspects. They take into account the key macro and market events and to what extent they have already been discounted in yields and\/or market spreads. They are also based on events which are expected to affect the market trend in terms of yields and\/or spreads in the short-medium term. The Trading Ideas may refer to both cash and derivative instruments and indicate a precise target or yield range or a yield spread between different market curves or different maturities on the same curve. The relative valuations may be in terms of yield, asset swap spreads or benchmark spreads.
Coverage Policy And Frequency Of Research Reports<\/strong>
Intesa Sanpaolo S.p.A. trading ideas are made in both a very short time horizon (the current day or subsequent days) or in a horizon ranging from one week to three months, in conjunction with any exceptional event that affects the issuer’s operations. In the case of a short note, we advise investors to refer to the most recent report published by Intesa Sanpaolo S.p.A’s Research Department for a full analysis of valuation methodology, earnings assumptions and risks. Research is available on IMI’s web site (www.bancaimi.com) or by contacting your sales representative.<\/p>\n