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Weekly update: week 31
Boris (Alexander) Johson, has manifested himself as a hard-line brexiteer. Where before his election there was still doubt that he might make a big switch between his rhetoric and actual policy, today it seems clear that he is on collision course with Brussels. Scotland and North Ireland have both expressed their dislike with this strategy and Europe seems unlikely to even consider a renegotiation. As a consequence, the GBP has crashed with some analyst stating that the Euro-GBP exchange rate could flip, making £1<€1. On the upside for the UK (if to remain a United Kingdom) a weak pound could boost the export and British listed companies with activities abroad see the incoming profits in foreign currencies rising due to the devaluation. In contrast to the face lift some parameters get due to a weak pound, the underlying economic fundamentals are strongly challenged. Leaving the European single market has a huge impact and a no deal scenario is very undesirable according to the Bank of England. In Belgium it is estimated 42.000 jobs would be lost due to a brexit.
- Harde brexittaal Boris Johnson doet pond crashen – De Tijd (30/7/2019)
- No-dealretoriek schrikt beleggers – De Tijd (30/7/2019)
- Schotse premier waarschuwt voor gevaarlijke strategie van Johnson – De Tijd (30/7/2019)
- No Deal kan Vlaanderen 28.000 jobs kosten – De Tijd (31/7/2019)
- BoE s Carney moddert liever door dan een vertrek zonder deal – FD (1/08/2019)
The ECB has confirmed last Thursday that they
will do everything in their power to fulfil their mandate. Mr. Draghi has
confirmed that in September the rate (currently -0.4%) can go lower. The
deterioration of the expected inflation in light of the economic slowdown and
uncertain economic climate have pushed the ECB to this position. In contrast to
the Fed, the ECB has not been able to raise the interest rates since the
previous crisis making it unclear how effective its policy will be.
The lower rates are not desirable for banks who, although have healthier balance sheets, fail to make decent profits with lower spreads on credit. Some argue that the minimum rate on savings which is applicable in som
Bond markets have responded quite strong to
the news, even though the exact decision is only for September, with government
bonds trading at very low/negative yields.
The effective return on all Swiss state loans with a term of 50 years was negative on Thursday. Here with all yields, from 3 months up to 50 years, had a negative interest rate.
In other news, the ECB has decided last Friday that the European Central banks will no longer coordinate the sale of gold in between all European Banks. This was an agreement made in 1999 to limit gold sales.
- Alle Zwitserse staatsleningen in negatief renteterrein – FD (25/07/2019)
- ECB zinspeelt op renteverlaging in september en bijkomende stimulus – FD (25/07/2019)
- Centrale banken stoppen afspraak coördinatie goudverkopen – FD (26/07/2019)
- Nog voordat centrale banken ingrijpen wordt de bedrijfsobligatiemarkt grondig verstoord – FD (26/07/2019)
- De ECB moet juist genieten van de lage inflatie – FD (29/07/2019)
- ING waarschuwt dat lage rente op de winst zal wegen – De Tijd (01/08/2019)
- Topman ING België stelt minimumrente spaarboekje in vraag – De Tijd (01/08/2019)
- ING-topman Hamers zeldzaam kritisch over ECB-beleid – De Tijd (01/08/2019)
The ECB has announced that they are happy to have Christine Lagarde as the successor of Mario Draghi. In light of the treaty on the functioning of the European union the 25 directors of the ECB have to give their opinion on the potential candidate
The Fed has announced its first rate reduction in 10 years. They will lower the interest rate from 2,25% to 2,00%. According to Powell this is single mid cycle correction. Some analysts believe that there might be 2 or 3 cuts needed and Mr. Trump thinks 25 bp is insufficient. The strong dollar, the economical uncertain climate (China + EU) and the trade war make it necessary to for a slight reverse of the monetary tightening. The ‘overvalutation’ of the dollar is seen as a problem by some.
- Fed plant eerste renteknip in tien jaar – De Tijd (31/07/2019)
- Amerikaanse beurzen onderuit na renteverlaging Fed – FD (31/07/2019)
- Federal Reserve verlaagt rente voor het eerst in tien jaar – FD (31/07/2019)
- Bodem euro is in zicht – De Tijd (01/08/2019)
The Belgian economy continues to cool down. In the second quarter of 2019, growth amounted to 0.2% which is 10 bp as anticipated. The inflation forecast of 1.6 % is below the 2% goal of the ECB. The NBB still maintains its overall growth for 2019 on 1.2%. The problem is not with consumption but with the corporate investments. Like in many European countries and developed economies, due to economic uncertainty investments are postponed. In addition, the rise in demand due to enlargement of the stock in function of the Brexit in the first quarter of 2019 has faded away. Companies are stalling their investment as they are questioning how to commit capital in function of their supply chain.
German banks perform terrible. When comparing the index of the German stock with the index of the German bank shares, the course has deviated significantly. In 2019, taking 1988 as index year, the difference was a tenfold with the index of German bank shares noting roughly par compared to 1988 and the index of German shares roughly 1.100.
Real Estate News
- Merin koopt in Hoofddorp, maar blijft zoeken naar kantoorgebouwen – VGJ (29/07/2019)
- Union Street verhuurt circa 4.300 m² kantoorruimte in HS Building – VGJ (29/07/2019)
- Esprit Europe huurt 1.800 m2 in gebouw Moermansk 400 – VGJ (31/07/2019)
- Kantoorgebouw Huidemaker na grondige renovatie verkocht in Amsterdam – VGJ (01/08/2019)
- Certitudo Capital verhuist naar zelfontwikkeld hoofdkantoor – VGJ (01/08/2019)
- Project Matexi in Waver wordt concreet – Expertise (26/07/2019)
- Minder appartementen vergund in April – Expertise (30/7/2019)
- Architecten MAS-museum bouwen een van de hoogste torens aan de Belgische kust – De Tijd (30/07/2019)
- Grote huurprijsverschillen woningen Rotterdam – VGJ (31/07/2019)
- Woonforte koopt wooncomplex in Alphen aan den Rijn – VGJ (31/7/2019)
- A.S.R. Real Estate koopt deel Phoenix portefeuille voor E100 miljoen – VGJ (01/08/2019)
- Woningcorporaties moeten mogelijk weer bijspringen voor Vestia – FD (26/07/2019)
- Logistiek vastgoedbedrijf WDP zet uitbreiding voort – FD (31/07/2019)
- WDP splitst aandeel in zeven – De Tijd (31/07/2019)
- VGP sluist acht gebouwen door naar joint venture met Allianz – De Tijd (31/07/2019)
- Wereldhave volle eigenaar van Ring Shopping – Expertise (26/07/2019)
- Action en Decathlon versterken Belle-Ile – Expertise (30/07/2019)
- Docks Brussel strikt eerste nieuwkomers – Expertise (30/07/2019)
- Helft van Frans winkelcentrum door ECP verkocht voor topprijs – VGJ (29/07/2019)
- Vastned vindt huurders voor hoofdpijnpanden Parijs – VGJ (31/07/2019)
- Winkelbeleggers zien waarde verdampen door online shopping – FD (26/07/2019)