The prospect of a more prolonged violent military conflict in Ukraine has, in our view, non-trivial implications for the country's much-discussed reconstruction process. Here we think of timing, sectoral issues, regional disparities, and security aspects related to investments, the labor market, and institutional-political factors. |
The creme de la creme of global central banking is heading to Jackson Hole, Wyoming, for a long weekend. In addition to indications on the further monetary policy course, longer-term directional statements are occasionally made at this symposium. Last year ECB (Schnabel) focussed on its "robust control approach" for fighting inflation. This time, we expect fewer surprises, especially since markets have had to come to terms with the "high for longer" outlook in recent weeks. |
The US tech index (NASDAQ-100) and the Austrian ATX are the outliers in our index coverage universe. Technology stocks on the other side of the Atlantic have performed extremely strongly this year, with signs of ambitious valuations approaching. The ATX performed disappointingly this year after a sharp drop in 2022. Between Lake Constance and Lake Neusiedl, stocks can be found at favourable prices compared to the NASDAQ. The ATX currently has a higher valuation discount than ever before compared to the broad (European) stock market. The risk premium to the bond market also seems interesting. |
The ECB will hike by 0.25 %-points this week, that's a given. Why you might still want to take a break from your vacation is the thrill about, what it signals for September. Will there still be more room to cover? Could be! However, we think the ECB will stress its data-dependent stance and will not pre-commit to another hike. Nonetheless, not all three core areas of relevance for data-driven monetary policy decisions need to show noticeable improvement by September. Therefore, the "robust inflation control approach" could still yield a September hike. |
What goals both sides in the Ukraine war (Russia/Ukraine) will be able to achieve in the coming weeks/months is currently fraught with great uncertainty. On the political/diplomatic level, trend-setting events are ahead. To what extent negotiated solutions will be put on the table later in H2 2023 will crucially depend to on developments in the coming weeks. In the economic sphere (including banking), certain stabilizations are discernible, following modest economic damage in Russia compared to Ukraine. Currently, the C/A balance and RUB are coming under stronger-than-expected pressure, while macro-financial stability is less an issue in Ukraine. |