Next week the ECB's balance sheet will shrink by over 6%. Further reduction will take place much more slowly – with uncertain consequences for the markets.
Europe’s bank sector has proven resilient since the Credit Suisse rescue but AT1 bonds have still not fully recovered – making them all the more attractive, in our view.
Emerged as relative winners in the fixed-income segment – and we believe they can still deliver
Europe’s banks and U.S. real estate – an unhealthy relationship once again questioned by markets.
The Fed stuck to its inflation-fighting script yesterday, pointing to other tools available for fighting market stress. Markets didn’t really appreciate it – but it does suit our script.
Immediate concerns alleviated, new concerns arise
