Bielmeiers Blog

DZ BANK

Stefan Bielmeier, DZ BANK’s Chief Economist and Head of Research, comments on economic developments in Europe, the USA and the Emerging Markets, assesses international financial market trends and gives his opinion on politics and economic policy – concisely, succinctly and to the point.

The economics and financial market experts of DZ BANK’s Research division support Stefan Bielmeier in his blog.

Find out more in Bielmeier‘s Blog about DZ BANK Research’s current topics, the experts’ focal areas, and their general viewpoints on the latest developments.
The fact remains: The road to a European deposit insurance scheme is a long and hard one

The debate about a joint European deposit insurance scheme is picking up steam again. In February, ECB President Mario Draghi called for the establishment of the EDIS (European Deposit Insurance Scheme) not to be delayed any longer. Aptly, the ECB published a study in April, in which the authors conclude that the EDIS would be able to guarantee cover for deposit losses even in the event of a severe banking crisis. German Chancellor Angela Merkel recently voiced her opinion on the matter at her meeting with Emmanuel Macron, where she declared Germany’s willingness to cooperate on a common deposit insurance system. However, she does not expect the project to be realised in the immediate future but rather in the longer term. In fact, there are still major challenges to be overcome on the way to a European deposit insurance scheme, including the reduction of excessive risks that lie dormant on…

Growth expectations dampen equity market outlook

» DZ BANK Research recently revised down its forecasts for global economic growth in 2018 and 2019 from 3.9% to 3.6%. » The Euro Stoxx and the DAX are likely to rise less steeply as a result of the poorer growth outlook. The new forecasts for the end of the year are: Euro Stoxx 50 3,600 (previously 4,000) points, DAX 13,300 (previously 14,000) points. » The valuation of both indices remains attractive, their potential is presentable. There are still good investment opportunities to be had. Geopolitical risks have increased in 2018 although the situation has calmed down somewhat in the past few days. A large number of hazardous areas (trade war USA/China, Syrian conflict, Iran/Saudi Arabia) have been reactivated, not least because of US President Trump, who seems to be shaking off the influence of his advisers more than ever. The dangers that are looming mean that companies and states…

Deutsche Bank, Credit Suisse and UBS: what they have in common; where they differ

As universal banks with a presence worldwide, Deutsche Bank, Credit Suisse and UBS generate a large part of their earnings outside their home market, and therefore, apart from economic conditions at home, the trend in the world economy and global assets form the framework for their activities. Economic conditions worldwide are generally good at present, and this is expected to remain the case in the next two years. In the last few years, UBS has generated more constant and higher earnings than Credit Suisse and Deutsche Bank. This shows that its activities are already better adjusted to changed economic conditions and more stringent regulatory requirements after a largely completed restructuring. Credit Suisse is currently busy implementing its strategic restructuring which involves focusing first and foremost on asset management and its further growth, while continuing to shed old activities. In spite of significant progress, however, the bank still has a lot…

Dip in sentiment among eurozone purchasing managers has been stopped for now

The decline in the trend indicator among European purchasing managers has been stopped for now in April following two consecutive dips. The continued high level suggests that the economy will continue to grow in the second quarter, albeit at a somewhat slower pace. A decline in the manufacturing industry was offset by better results among the service providers. The Composite Output Index, which condenses views from both sectors, therefore remained unchanged from the previous month at 55.2 points. The latest survey results are consistent with our estimation. The correction to the trend indicators in recent months as well as the increase in political tensions worldwide are likely to have unsettled the corporate world. Economic growth should therefore have been more moderate in the first two quarters of 2018, compared with the relatively strong previous quarters. In terms of country, the IHS Markit survey results show that the composite indicators in…

SNB closes the “EUR/CHF exchange-rate floor“ chapter

Three years, three months and four days after the Swiss National Bank abandoned its EUR/CHF exchange-rate floor, it has finally happened. For the first time since 15th January 2015, the currency pair climbed back over the EUR/CHF 1.2000 mark yesterday evening. Even the Swiss, who are well-known for their reserve, will probably have responded to this event with a certain degree of euphoria since they can now regard the difficult and controversial “exchange-rate floor” chapter as being definitively closed. Interestingly, it has, for the most part, been factors from outside Switzerland which have had a major bearing on the trend in the euro-Swiss cross since the second quarter of last year (it should be recalled that the exchange rate was still standing in the vicinity of EUR/CHF 1.0650 around one year ago). The euro has gained traction against the Swiss franc in particular on the back of the outcome of…

Data protection and social media: bringing together things that previously did not match

The past few weeks have been turbulent for Facebook. The social media platform has been forced to admit that the personal data of up to 87 million of its users had been the object of an unauthorised sale by a former psychology professor in the context of an opinion survey to the data analyst company Cambridge Analytica. The latter is suspected of having used the data acquired in this way for activities including the election campaign of U.S. President, Donald Trump, among other things. In 2017, Google, which is a subsidiary of Alphabet Inc, was the subject of criticism when the video portal, YouTube, placed ads of well-known companies next to extremist and racist videos. In recent years, the two online behemoths have enjoyed huge success with the collection and analysis of personal data – considered the “gold of the 21st century“ – for the purposes of online advertising aimed…