The European Central Bank’s June meeting has offered some long-hoped-for clarity on the future direction of monetary policy in the eurozone. However, it hasn’t provided all the answers, and much remains open to interpretation. David Zahn, Franklin Templeton’s head of European Fixed Income, considers what might happen next and explains why he’s still not expecting a eurozone interest-rate hike before 2020.
The future of the European Central Bank’s three-year-old quantitative easing program lies in the balance. Will the bank’s governing council use its scheduled June meeting to extend the program or confirm that asset purchases will end in September? David Zahn, Franklin Templeton’s head of European Fixed Income, believes recent European economic data and political developments in Italy point towards an extension. And he argues that means eurozone interest-rate hikes are unlikely before 2020.
In this month's Global Economic Perspective, our Fixed Income Group opines on rising energy prices, US Treasury yields, emerging-market currency pressures and global economic growth.
Two months after the Italian election, the country is on the verge of a new government led by the right-wing La Lega and left-wing Five Star movement. While markets take some time to digest the full implications of this unusual tie-up, David Zahn, Franklin Templeton’s head of European Fixed Income, offers his analysis of the political situation.
No outright winner emerged from the Italian general election, but as David Zahn, Franklin Templeton’s head of European Fixed Income, explains, that situation is normal for Italy. He expects a muted response from European bond markets but cautions there may be consequences down the road if the authorities fail to take the need for reform seriously.
The upcoming Italian election is not attracting the same sort of attention among investors as votes last year in France and Germany. For that very reason, David Zahn, Franklin Templeton’s head of European Fixed Income, believes an unexpected result might provoke an outsized market reaction.
For fixed income investors eyeing opportunities in Europe, 2018 should be the year economic fundamentals reassert their worth, according to David Zahn, Franklin Templeton’s head of European Fixed Income. Nonetheless, Zahn believes many investors are underappreciating the long-term implications for Europe of the biggest political uncertainty for the region—Brexit.
Angela Merkel’s re-election as German Chancellor was very much expected, but the implications of her victory are harder to predict. Here three of our portfolio managers with a particular interest in Europe share their views on what Merkel’s victory could mean for the region.
As Germany prepares to go to the polls in its general election, David Zahn, Franklin Templeton Fixed Income Group’s head of European fixed income, considers what the result could mean for Europe, the European Union and the eurozone.
Speculation had been rife that the European Central Bank might have used its September Governing Council meeting to signal the start of tapering for its quantitative easing program. That confirmation didn’t come, switching attention to the October 26 meeting.