Interest rate outlook: Eurozone economy now in “Goldilocks” phase

Invesco Fixed Income shares its views of rates around the world

Europe:

The risks around the French elections are now behind us, and we are unlikely to face a far right insurgency in the next electoral test: Germany. In the background, European data continue to be solid and resilient to political risks. Given the French election’s market-friendly outcome, we expect a renewed focus on fundamentals and European Central Bank (ECB) watching going forward. As post-election short covering winds down, we expect European core yields to resume their upward trend and peripheral spreads versus German bunds to widen again. The periphery could come under more pressure in the unlikely event that early elections are held in Italy.

US:

Stronger global growth is likely to be

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Currency outlook: European economic activity continues to improve

Invesco Fixed Income shares its views of currencies around the world

Euro:

Our outlook for the euro remains constructive over the medium term. European economic activity continues to improve and should eventually allow the European Central Bank to pivot on quantitative easing (QE) and embark on tapering. We expect the euro to appreciate in this environment and this may unfold in Q2/Q3 this year. In general, we believe QE has approached its conclusion and policy adjustments going forward are likely to be skewed toward supporting longer-term euro strength.

Renminbi:

We expect the Chinese currency (onshore and offshore) to trade on the

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Interest rate outlook: European markets return to fundamentals

Invesco Fixed Income shares its views of rates around the world

Europe:

The risks around the French elections have decreased tremendously following the comfortable Macron victory in the May 7 election. At the same time, data out of Europe continue to be solid and resilient to political risks. Given the French election’s market-friendly outcome, we expect a renewed focus on fundamentals and European Central Bank (ECB) watching going forward. As post-election short covering winds down, we would expect European core yields to resume their upward trend and peripheral spreads versus German bunds to widen again.

US:

We are constructive on global growth and believe it will exceed market expectations. Although we expect

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Europe: Are elections overshadowing opportunities?

Election risk is real, but we see strong potential in certain areas

Ask any investor in Europe what concerns them most, and election risk will likely be near the top of the list. With French and German elections looming, and the fallout from the UK’s Brexit vote ongoing, that concern is to be expected. However, the Invesco International and Global Growth team believes that election risk — while real — may be overstated. Looking through our EQV (Earnings, Quality and Valuation) lens, we believe that valuations in the highest-quality companies are expensive, but we have been opportunistic in finding new names that are seeing short-term dislocations.

Elections take center stage in France and Germany

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Buckle up and look for opportunity in Europe

Despite improved growth, political uncertainty may give investors a bumpy ride in 2017

Dennis_Matt_sm_150dpi_RGBA brimming political calendar will make 2017 an eventful year for Europe. While a bumpy ride seems all but certain, it could mean increased opportunity for investors, given the heavy political slate and investor skepticism.

Brexit and beyond

Brexit, of course, is on the world’s radar. On the heels of the UK’s 2016 referendum, Prime Minister Theresa May has pledged to trigger Article 50 of the Lisbon Treaty by March. That would begin the two-year window for the UK to extricate itself from the European Union (EU). Even with the exit details not yet worked out, the significant reaction to the vote

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