Three snapshots for Tuesday
The German ZEW economic sentiment index for March smashed expectations, coming in at 22.3 against the Reuters poll of 10.0. Over the last couple of years the German 10 year Bund yield has tended to track the ZEW, however this has broken down with yields staying below 2% despite the rebound in economic sentiment.
Improving earnings momentum has been backing up the rally in equities with fewer analysts taking the hatchet to earnings forecasts. The chart below shows that the 3-month average revisions ratio (the number of earnings upgrades minus downgrades as a percent of the total) looks to have turned back towards positive – especially in Europe.
Are emerging markets joining the dividend race?. As this chart of Datastream equity indices shows, the payout ratio for emerging market equities is now above that of the US. Traditionally seen as a growth-based investment, is this another sign of emerging market equities moving closer into line with developed?