Resume af teksten:
Stigende obligationsrenter fra september præger fortsat markederne i Europa.
Frankrigs budgetplaner og politiske debat øger usikkerheden om landets statsobligationer.
Politisk usikkerhed i Spanien bidrager også til markedernes bekymringer.
ECB kan gribe ind ved forværret markedsstress, men de nuværende forhold vurderes at ligge under niveauet for intervention.
Salget af franske obligationer har også påvirket andre europæiske obligationer, bankaktier og euroen.
Centralbanker fokuserer på at signalere stabile renter, mens inflation og højere oliepriser fortsat skaber usikkerhed.
Euroen er kommet under pres mod dollaren, og valutamarkederne præges fortsat af stærke valutaer i vækstmarkeder.
Europæiske aktier forventes fortsat at klare sig svagere end globale markeder, mens amerikanske teknologiaktier fylder mere i globale indeks.
Fra Julius Bär:
Can Europe navigate rising borrowing costs and political uncertainty?
The economic calendar may be quiet, but markets still have plenty to navigate. The sharp rise in bond yields seen in September continues to weigh on investors, and Europe is now facing the same challenges already seen in the US and Japan, where higher borrowing costs have become a political issue.
France is at the centre of attention as investors scrutinise its budget plans, while political uncertainty in Spain is adding to concerns. For now, these are political challenges rather than central bank ones. The European Central Bank (ECB) could step in if market stress worsens, but current bond-market conditions remain well below the level that would likely require intervention. Instead, central banks are focused on reassuring investors that interest rates may remain steady rather than moving higher. Recent comments from Federal Reserve officials and softer US jobs data support that view, although inflation and higher oil prices mean policymakers are unlikely to declare victory just yet.
Markets may therefore spend the coming week looking for signs of stability rather than the start of a new trend. Beyond a small group of AI-related US stocks, investor positioning has become stretched and many assets appear oversold after recent market weakness. If bond yields begin to stabilise and political tensions ease, there could be scope for a recovery later this month.
How are France’s fiscal challenges impacting European markets?
French government bonds are likely to remain volatile in the months ahead as investors closely watch the country’s proposed budget and the political debate surrounding it. With the presidential election approaching, expectations around government spending and public finances are likely to remain a key focus for markets.
In this environment, we continue to favour EUR-denominated investment-grade corporate bonds, which should be less exposed to France’s fiscal uncertainty than government debt. We also see value in peripheral European government bonds, although recent developments in France have created some short-term pressure across the asset class.
What started as a sell-off in French government bonds has increasingly spread to other parts of the market, including bonds issued by countries with weaker finances, European bank stocks and the euro. This broader market impact is important because it could influence the ECB. While France-specific volatility alone is unlikely to trigger action, a wider deterioration in financial conditions across Europe could prompt the ECB to adopt a less hawkish stance.
For now, we believe the ECB remains an important backstop if market stress intensifies and spreads beyond French government bonds, helping to limit the risk of a more severe market disruption.
Should investors favour US Equities or Emerging Market currencies over Europe?
Last week, we downgraded the euro against the US dollar to neutral. We have long believed that strong stock markets tend to support a country’s currency, as investors increase their exposure to both equities and other domestic assets. The euro has come under pressure recently, and the outlook could weaken further if EUR/USD falls below 1.08. However, the bigger story in currency markets continues to be the strength of emerging market currencies. As a result, we continue to favour the Mexican peso and Brazilian real relative to the euro.
We also expect European equities to resume their underperformance versus global markets and maintain an underweight view. That said, much of Europe’s weaker performance over the past decade can be explained by the exceptional rise of large US technology companies, which have become an increasingly dominant part of global indices.
For investors using broad market indices, this supports maintaining an overweight position in US equities, particularly in technology. However, investors selecting individual stocks may find more attractive opportunities outside the US tech sector. In areas such as banking, for example, European and Asian stocks could offer stronger value and return potential than their US counterparts.
Kilde: Julius Bär, https://your.juliusbaer.com/insights/c/jP_aWo9pT2WKp3HqpHFyywvGnB_ECqSkG6QvZIGFJOVgLu-gsVzTQT-E2BEGK5qj9g
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