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Global

After decades of rapid globalisation, national economies and financial systems are more closely connected than ever before. At the same time, open markets and free competition are increasingly under criticism and even restricted. A major part of the work of Deutsche Bank Research therefore focuses on how Europe fares in an international comparison, how changing structures and the regulatory framework influence the development of financial service providers, their clients and financial markets globally, and which opportunities and risks result from long-term megatrends such as climate change, demographic change, digitalisation and new forms of mobility.

78 Documents
April 23, 2018
Markets have been on their toes since the correction that started at end-January. Listless trading certainly reflects this malaise: major equity indexes have not suffered another sharp selloff but nevertheless remain near their year-to-date lows. While fundamentals remain robust, geopolitics and trade war fears, concerns over slowing global growth, and idiosyncratic issues in the tech sector have all weighed. [more]
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March 14, 2018
Robust, broad-based global expansion. Synchronised growth across regions and economies, in many cases at above-trend levels. We expect global growth to accelerate to +3.9% this year, marginally above 2017, as fundamentals remain supportive. We expect the US and eurozone to continue growing above potential, but do not anticipate any further acceleration. In China, we expect growth to slow, and are more worried about inflation and financial risks than consensus. 2018 should mark the peak of the current cyclical expansion; growth should decelerate from 2019. [more]
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March 1, 2018
In the fourth part of our series on the impact of rising yields, we discuss the rising incidence of zombie firms in recent years. Bottom-up data of some 3,000 companies in the FTSE All World index show that the percentage of zombie firms has more than tripled to 2.0% of firms in 2016 from 0.6% in 1996. Such firms are defined as those with an interest coverage ratio under 1x for 2 consecutive years and a price to sales ratio under 3x. That matters because zombie firms are linked to fading business dynamism and because years of low interest rates should have led to fewer such firms, not more. There are early signs we are at a turning point, however. The numbers for 2017, with two-thirds of firms reporting, suggest that zombie firm incidence declined sharply last year. If this proves to be a real trend, it may give central banks confidence that continuing to raise rates and pull away from unconventional monetary policy will have some advantages. [more]
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February 19, 2018
Opinions differ when it comes to bitcoin. Discussions are triggered largely by bitcoin’s spectacular price increasess and are not very informed or nuanced. In this paper we focus on several standard claims, which we will put into context and, if necessary, rectify. This will hopefully help our readers to familiarise themselves with the topic. [more]
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February 15, 2018
Analyst:
The rise of bitcoin and other cryptocurrencies and the decline in cash payments are the background for a new concept: digital cash issued by central banks. An old academic debate about who creates money and how is resurfacing, but what about the user’s perspective? Why would we use crypto euros? Such digital cash would compete against bank deposits, physical cash and private cryptocurrencies to win over consumers in the areas of payments and savings. [more]
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February 9, 2018
Opinions differ when it comes to bitcoin. Discussions are triggered largely by bitcoin’s spectacular price increasess and are not very informed or nuanced. In this paper we focus on several standard claims, which we will put into context and, if necessary, rectify. This will hopefully help our readers to familiarise themselves with the topic. [more]
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February 7, 2018
After a stellar 2017 and an even stronger January, risk assets have undergone a sharp pullback in the last week. Initially triggered by higher rates as markets repriced inflation expectations higher, the episode evolved into a technical spout of volatility exacerbated by programmatic strategies. The pullback is healthy, after a highly unusual stretch of market tranquility. [more]
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January 25, 2018
The lead market commentator of the Financial Times this morning writes that the dollar sell-off has “stopped making sense”. Indeed, viewed with the post-crisis lens of activist central banks and exceptionally tight correlations between FX and rates the dollar is entirely out of line with fundamentals. But currency moves over the medium-term ultimately boil down to one thing: flows. If inflows into an economy pick up the currency strengthens and vice versa. Looked at from a flow perspective, the dollar bear market makes complete sense: our outlook for FX 2018 argued that the flow picture is exceptionally supportive for EUR/USD and this positive dynamic is currently playing out. [more]
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