Rhea Shah highlights three key conclusions from the European Insurance team’s annual ESG report on CEO compensation – in particular noting that 2022 pay was back above pre-Covid levels, and that targets look appropriate for the most part. The report assesses the extent to which variable remuneration metrics are aligned with shareholder expectations and wider stakeholder interests for over 20 CEOs.
Please reach out to your db Sales representative for further information.
[more]

The modern world has not freed itself from distance and geography. The globalised economy is built on a web of five fragile and largely forgotten pinch points. [more]

Current advances in AI and a media-savvy generation - in combination with the Internet of Things, edge computing and 5G - provide the opportunity to rethink smart city models such as City 5.0 and soft city. We discuss some use cases – and the trade-offs to be resolved – that arise from connecting and automating a city. Besides digital platforms – now augmented by AI –, smart city market segments such as smart buildings, digital energy and environmental solutions are expected to grow strongly in the coming years. Since not all of these are likely to be publicly funded, interesting investment opportunities do arise to create more efficient, sustainable, and livable urban spaces. [more]

In this dbInSights episode, Stefan Schneider talks about the problem areas of the German economy. On balance, DB Research expects growth of only 0.3% in the coming year. At the same time, there are first signs of an economic recovery. [more]

Production in major industrial sectors in Germany has developed very differently in recent years under the impact of the coronavirus pandemic and energy price shock. For example, manufacturing in electrical engineering rose by 18% compared with the start of 2015. In the chemical industry, there has been a 20% decline over the same period. The differences are not only cyclical, but also structural. In the future, it will be more important to distinguish between Germany as an industrial location and the German industry. [more]

September's CPI report was released this morning. Please watch Deutsche Bank economist Justin Weidner and spokesperson Gary Ramsay debrief today's data. [more]

A double-dip recession. Hard and soft data point to a GDP contraction of about 0.3% in Q3. Despite receding inflation,we expect that private consumption will only gradually come out of its rut, as consumer confidence has remained depressed. While the overall decline in GDP over the double-dip recession (Q4 22/Q1 23 and Q3 23) will probably be less than 1 percentage point, a renewed fall in GDP provides another blow to already downbeat German confidence. This negative feedback loop will likely weigh on the economy in 2024. In particular, structural supply bottlenecks look set to hamper growth opportunities and the energy transition is likely to slow potential growth in Germany towards 0.5% and keep the inflation rate above 2%. [more]

Recent months have seen a mounting case for a US soft landing as inflation has fallen without much stress in the labour market. Yet at the same time, the global economy is now being buffeted by several headwinds and the backdrop is fragile, with sovereign bond yields at multi-year highs across the world. [more]

Company margins may soon feel the pinch from rising labour power. Recent events, like Biden joining UAW picket lines and Trump's address in Detroit, highlight the wide 'power gap' between companies and their employees. This gap is likely to shrink this decade. A new research report by Olga Cotaga and Luke Templeman reveals this and several other factors. [more]

In this report, we provide an update on key developments in German politics:
#1 How to tackle the growth malaise - tax reform and cutting red tape as first steps. Despite dwindling poll numbers and weak growth prospects, the government’s appetite for sweeping structural reforms appears limited. We take a look at the government’s “10 point action plan”, the proposed corporate tax reform, and renewed efforts to cut red tape.
#2 Rise of the far-right. Sticky inflation, change-fatigue and rising immigration have contributed to rising approval rates of the far-right AfD, reaching an all-time high at 21.5% in opinion polls in recent weeks. We analyze what that means for coalition building in the upcoming regional elections (both this weekend and next year) and how this might influence the overall policy debate at the federal level.
#3 Polls suggest conservatives set to win regional elections in Bavaria and Hesse on October 8. We give an update on how Sunday’s regional elections in two of Germany’s most populous states might impact national policy-making and the likelihood of agreeing on a new set of EU fiscal rules by year-end. [more]