Beyond Bulls & Bears

The EU: Singing from 28 Hymn Sheets
Fixed Income

The EU: Singing from 28 Hymn Sheets

What’s the investment lesson in Europe’s recent parliamentary elections? Our Fixed Income CIO Sonal Desai says it’s differentiation. Read more of what’s on her mind about this topic. 

European Elections: Big Changes, or Business as Usual?
Fixed Income

European Elections: Big Changes, or Business as Usual?

Many observers are predicting that European elections later this month will usher a wave of populist representatives into the European Parliament. David Zahn, Head of European Fixed Income, Franklin Templeton Fixed Income Group, believes there may be a shift in political balance, but suggests the ability of extremists at either end of the political spectrum to dramatically alter the direction of the European Union is likely to be limited.

Eurozone Debt Disputes Make an Unhappy Union
Fixed Income

Eurozone Debt Disputes Make an Unhappy Union

When investing in sovereign debt, there is a level of trust involved—faith a government will return an investor’s principal plus interest without fail. But Franklin Templeton Fixed Income doesn’t see this as blind faith; it must be backed by verifiable economic metrics. In this excerpt from the latest “FT Thinks,” our Head of European Fixed Income David Zahn outlines how governments have changed in Europe, and how new politicians with fresh agendas can bolster confidence, or rouse concerns.

MPs Say No to No Deal, But an Accidental Hard Brexit Remains a Possibility
Fixed Income

MPs Say No to No Deal, But an Accidental Hard Brexit Remains a Possibility

UK members of parliament have voted to reject a situation in which the United Kingdom crashes out of the European Union without a deal. But with only days until the official leave date, the options for a tidy resolution are limited. David Zahn explains why he expects the UK government now to seek an extension to the Brexit negotiations.

Why We Think Most “Brexit Panaceas” Are Ill-Thought-Through or Unviable
Equity

Why We Think Most “Brexit Panaceas” Are Ill-Thought-Through or Unviable

“It is symptomatic of the level of debate that the options which tend to get offered as panaceas for Brexit are rarely thought-through or viable.” Sandy Nairn, Chairman of Templeton Global Equity Group and CEO of Edinburgh Partners

Italian Election Result: Political Uncertainty is Business as Usual for Italy
Fixed Income

Italian Election Result: Political Uncertainty is Business as Usual for Italy

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.

Italian Election Outlook and Why We Don’t See an ECB Rate Hike Before 2020
Fixed Income

Italian Election Outlook and Why We Don’t See an ECB Rate Hike Before 2020

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. And while investors seem more preoccupied with the trajectory of eurozone monetary policy, Zahn believes there are good reasons to think the European Central Bank will hold off until 2020 before pushing interest rates up.

The Underappreciated Story: How Brexit Threatens to Shift the Balance of Power in the EU
Fixed Income

The Underappreciated Story: How Brexit Threatens to Shift the Balance of Power in the EU

“We think the United Kingdom’s departure from the EU may start to show up differences of attitude among different factions within the trading bloc. And, it may bring about a switch in the balance of power in the European Parliament.” David Zahn, Head of European Fixed Income.

UK Election Result: Grounds for Optimism in the Medium Term?
Equity

UK Election Result: Grounds for Optimism in the Medium Term?

“The UK election result came as a shock to most observers, but early indications suggest financial markets don’t view it as an end of the world scenario. And there are indications that some positives could emerge over the medium term.” Colin Morton, vice president, portfolio manager, UK Equity Team, June 9, 2017.

The Great Sector Rotation, and the Road Ahead for UK Equities
Equity

The Great Sector Rotation, and the Road Ahead for UK Equities

In the closing months of 2016, there were big changes in some of the financial metrics that feed into economic assumptions and indeed equity valuation assumptions, and we think that sets the tone for where we move into 2017.

Why Markets Are More Cautious About the Next Potential Political Pitfall
Fixed Income

Why Markets Are More Cautious About the Next Potential Political Pitfall

Although the Italian constitutional referendum may seem parochial compared with the US election or the Brexit vote, it has the potential to bring further uncertainty to a European Union which is already struggling to digest the implications of Trump’s victory.