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Welcome to Fidelity

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Willkommen bei Fidelity

Wählen Sie Ihren Standort aus, damit wir Ihnen die für Sie passenden Informationen anzeigen können.

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I confirm that I am accessing this website for the purpose of acquiring information as, or for, an Institutional Investor (a corporate or other non-retail investor acting for their own account).

By accessing the restricted area I confirm my agreement with‚ and understanding of‚ the following terms of use and the legal provisions. If I do not agree to the terms and legal conditions‚ I must not access this website or any pages thereof. I acknowledge that access to the information contained on this website is available to "Qualified Investors" only as defined below. A private individual or legal representative or any other party without this qualification should not enter this website.

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I understand the information contained in this website is not directed at, nor is it intended for distribution to, or use by, persons in any jurisdiction in which the dissemination of such investment related information is not permitted. I also understand that the information contained in this site is not directed to any party that may be defined as a ‘retail investor’ by the home regulator of the country in which the website is being accessed. I understand that the information or opinions contained herein should not be construed as an offer to sell or the solicitation of an offer to buy any investment product nor shall any such investment products or services be offered or sold to any person in any jurisdiction in which such offer, solicitation, purchase or sale would be unlawful. Fidelity has expressed its own views and opinions on this website, and these may change and there is no obligation to update them. Nothing in this website should be construed as investment, tax, legal or other advice. The information contained herein is subject to change without notice.

I understand the information contained in this website is not directed at, nor is it intended for distribution to, or use by, persons in any jurisdiction in which the dissemination of such investment related information is not permitted. I also understand that the information contained in this site is not directed to any party that may be defined as a ‘retail investor’ by the home regulator of the country in which the website is being accessed. I understand that the information or opinions contained herein should not be construed as an offer to sell or the solicitation of an offer to buy any investment product nor shall any such investment products or services be offered or sold to any person in any jurisdiction in which such offer, solicitation, purchase or sale would be unlawful. Fidelity has expressed its own views and opinions on this website, and these may change and there is no obligation to update them. Nothing in this website should be construed as investment, tax, legal or other advice. The information contained herein is subject to change without notice.

This website has been issued by FIL Fund Management Limited, a Bermuda company licensed to conduct investment business by the Bermuda Monetary Authority. Neither FIL Fund Management Limited, its parent company FIL Limited, nor any of their group companies or affiliates makes or gives any warranty or representation that any information contained on this website is accurate, complete, or fit for any particular purpose.

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Je comprends que les informations contenues sur ce site Internet sont destinées exclusivement aux investisseurs résidant en France et ne doivent pas être diffusées à quiconque pouvant être considéré comme un investisseur particulier. Je comprends que les informations ou opinions présentées sur ce site ne constituent pas des recommandations d’achat ou de vente. Fidelity a exprimé ses propres vues et opinions sur ce site Internet, et celles-ci peuvent évoluer sans que Fidelity n’assume aucune obligation de les actualiser. Aucun élément de ce site Internet ne doit être interprété comme un avis d’investissement, fiscal ou juridique ou autre. Les informations que comporte ce site peuvent changer sans notification.

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Mir ist bewusst, dass sich die Informationen auf dieser Website nicht an Personen richten bzw. für sie bestimmt sind, in deren Land die Verbreitung solcher anlagebezogenen Informationen nicht erlaubt ist. Mir ist bewusst, dass die hier zu findenden Informationen oder Meinungen nicht als Aufforderung zum Kauf oder Verkauf eines Anlageprodukts zu verstehen sind. Es sollen auch keine solchen Anlageprodukte oder Dienstleistungen Personen angeboten oder verkauft werden, in deren Land ein entsprechendes Angebot, eine Aufforderung, ein Erwerb oder Verkauf ungesetzlich wäre. Fidelity äußert auf dieser Website seine eigenen Ansichten und Meinungen, die sich jederzeit ändern können, ohne dass eine Verpflichtung zur Aktualisierung besteht. Kein Inhalt dieser Website ist als Beratung in Bezug auf Geldanlagen, Steuern, rechtliche oder sonstige Aspekte zu verstehen. Die hierin enthaltenen Informationen können sich ohne entsprechende Mitteilung jederzeit ändern.

Mir ist bewusst, dass sich die Informationen auf dieser Website nicht an Personen richten bzw. für sie bestimmt sind, in deren Land die Verbreitung solcher anlagebezogenen Informationen nicht erlaubt ist. Mir ist ebenfalls bewusst, dass sich die Informationen auf dieser Website nicht an Adressaten richtet, die von der Aufsichtsbehörde in dem Land, von dem aus die Website besucht wird, möglicherweise als „Privatanleger“ klassifiziert werden. Des Weiteren ist mir bewusst, dass die hier zu findenden Informationen oder Meinungen nicht als Aufforderung zum Kauf oder Verkauf eines Anlageprodukts zu verstehen sind. Es sollen auch keine solchen Anlageprodukte oder Dienstleistungen Personen angeboten oder verkauft werden, in deren Land ein entsprechendes Angebot, eine Aufforderung, ein Erwerb oder Verkauf ungesetzlich wäre. Fidelity äußert auf dieser Website seine eigenen Ansichten und Meinungen, die sich jederzeit ändern können, ohne dass eine Verpflichtung zur Aktualisierung besteht. Kein Inhalt dieser Website ist als Beratung in Bezug auf Geldanlagen, Steuern, rechtliche oder sonstige Aspekte zu verstehen. Die hierin enthaltenen Informationen können sich ohne entsprechende Mitteilung jederzeit ändern.

Diese Website wurde von FIL Fund Management Limited eingerichtet, einem Unternehmen mit Sitz auf bzw. nach dem Recht der Bermuda-Inseln, das über eine Genehmigung der Bermuda Monetary Authority zur Ausübung von Investmenttätigkeiten verfügt. Weder FIL Fund Management Limited noch sein Mutterunternehmen FIL Limited oder irgendein anderes Konzernunternehmen oder verbundenes Unternehmen übernimmt die Gewähr dafür oder erklärt, dass die Informationen auf dieser Website zutreffend, vollständig oder für jedwede Zwecke geeignet sind.

Ich erkenne an, dass weder FIL Fund Management Limited noch FIL Limited oder ein anderes Konzernunternehmen bzw. verbundenes Unternehmen für etwaige Verluste haftet, die direkt oder indirekt aus einer auf dieser Website beschafften Information resultieren. Durch Annahme dieser Erklärung bestätige ich auch mein Einverständnis mit den Nutzungs- und Geschäftsbedingungen dieser Website, die ich gelesen und verstanden habe.

Fidelity International, das Fidelity International Logo und das F-Symbol sind Markenzeichen von FIL Limited, einem nach dem Recht der Bermuda-Inseln eingetragenen Unternehmen.

Diese Website präsentiert Informationen in englischer und deutscher Sprache. Als professioneller Anleger akzeptiere ich hiermit, Informationen in mehr als einer Sprache zu erhalten.

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Confermo di voler accedere a questo sito web per acquisire informazioni in veste o per conto di un Investitore istituzionale (una società o altro investitore non retail che agisce per proprio conto).

Riconosco che le informazioni contenute in questo sito web non sono dirette né sono destinate alla distribuzione o all’uso da parte di soggetti in qualsiasi giurisdizione in cui la diffusione di tali informazioni relative allinvestimento non è consentita. Riconosco inoltre che le informazioni contenute in questo sito web non sono dirette a soggetti che potrebbero essere definiti "investitori retail" dall'autorità di vigilanza nazionale del paese dal quale si accede al sito stesso. Riconosco che le informazioni o le opinioni contenute in questo sito web non devono essere interpretate come un'offerta di vendita o come la sollecitazione di un'offerta di acquisto di un prodotto o un servizio di investimento, né tali prodotti o servizi di investimento possono essere offerti o venduti a soggetti di giurisdizioni nelle quali tale offerta, sollecitazione, acquisto o vendita sarebbero illegali. Questo sito web contiene giudizi e opinioni espressi da Fidelity, che sono soggetti a modifica e rispetto ai quali non sussiste alcun obbligo di aggiornamento. Nulla di quanto contenuto in questo sito web va considerato come una consulenza di investimento, fiscale, legale o di altra natura. Le informazioni qui riportate sono soggette a modifica senza preavviso.

Questo sito web è pubblicato da FIL Fund Management Limited (una società delle Bermuda autorizzata a svolgere attività d'investimento dalla Bermuda Monetary Authority). Né FIL Fund Management Limited, né la sua società madre FIL Limited, né alcuna delle loro società del gruppo o affiliate fornisce o rilascia alcuna garanzia o dichiarazione che le informazioni contenute in questo sito web siano accurate, complete o adatte a uno scopo particolare.

Riconosco che né FIL Fund Management Limited, né FIL Limited né alcuna delle loro società del gruppo o affiliate si assumono alcuna responsabilità per eventuali perdite derivanti direttamente o indirettamente da informazioni ottenute da questo sito web. Accettando questa dichiarazione confermo anche di aver letto, compreso e accettato i Termini e le condizioni d'uso del sito web.

Fidelity International, il logo Fidelity International e il simbolo F sono marchi di proprietà di FIL Limited, una società costituita nelle Bermuda.

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Important information

I confirm that I am accessing this website for the purpose of acquiring information as, or for, an Institutional Investor (a corporate or other non-retail investor acting for their own account).

I understand the information contained in this website is not directed at, nor is it intended for distribution to, or use by, persons in any jurisdiction in which the dissemination of such investment related information is not permitted. I also understand that the information contained in this site is not directed to any party that may be defined as a ‘retail investor’ by the home regulator of the country in which the website is being accessed. I understand that the information or opinions contained herein should not be construed as an offer to sell or the solicitation of an offer to buy any investment product nor shall any such investment products or services be offered or sold to any person in any jurisdiction in which such offer, solicitation, purchase or sale would be unlawful. Fidelity has expressed its own views and opinions on this website, and these may change and there is no obligation to update them. Nothing in this website should be construed as investment, tax, legal or other advice. The information contained herein is subject to change without notice.

This website has been issued by FIL Fund Management Limited, a Bermuda company licensed to conduct investment business by the Bermuda Monetary Authority. Neither FIL Fund Management Limited, its parent company FIL Limited, nor any of their group companies or affiliates makes or gives any warranty or representation that any information contained on this website is accurate, complete, or fit for any particular purpose.

I acknowledge that neither FIL Fund Management Limited, FIL Limited, nor any of their group companies or affiliates will have any liability for any losses arising directly or indirectly from any information accessed from this website. By accepting this representation I also confirm my agreement to the website Terms and Conditions, which I have read and understood.

Please note that FIL Fund Management Limited is not licensed by the Liechtenstein Financial Market Authority (“FMA”) and is not subject to the supervision of the FMA.

Fidelity International, the Fidelity International logo and F symbol are trademarks of FIL Limited, a company existing under the laws of Bermuda.

If the above representation is correct, please click 'I agree' below to continue to the site.

Wichtige Informationen

Hiermit bestätige ich, dass ich diese Website zur Informationsbeschaffung als institutioneller Anleger (ein auf eigene Rechnung handelndes Unternehmen oder ein anderer nicht als Privatanleger geltender Investor) bzw. für einen institutionellen Anleger besuche.

Mir ist bewusst, dass sich die Informationen auf dieser Website nicht an Personen richten bzw. für sie bestimmt sind, in deren Land die Verbreitung solcher anlagebezogenen Informationen nicht erlaubt ist. Mir ist ebenfalls bewusst, dass sich die Informationen auf dieser Website nicht an Adressaten richtet, die von der Aufsichtsbehörde in dem Land, von dem aus die Website besucht wird, möglicherweise als „Privatanleger“ klassifiziert werden. Des Weiteren ist mir bewusst, dass die hier zu findenden Informationen oder Meinungen nicht als Aufforderung zum Kauf oder Verkauf eines Anlageprodukts zu verstehen sind. Es sollen auch keine solchen Anlageprodukte oder Dienstleistungen Personen angeboten oder verkauft werden, in deren Land ein entsprechendes Angebot, eine Aufforderung, ein Erwerb oder Verkauf ungesetzlich wäre. Fidelity äußert auf dieser Website seine eigenen Ansichten und Meinungen, die sich jederzeit ändern können, ohne dass eine Verpflichtung zur Aktualisierung besteht. Kein Inhalt dieser Website ist als Beratung in Bezug auf Geldanlagen, Steuern, rechtliche oder sonstige Aspekte zu verstehen. Die hierin enthaltenen Informationen können sich ohne entsprechende Mitteilung jederzeit ändern.

Diese Website wurde von FIL Fund Management Limited eingerichtet, einem Unternehmen mit Sitz auf bzw. nach dem Recht der Bermuda-Inseln, das über eine Genehmigung der Bermuda Monetary Authority zur Ausübung von Investmenttätigkeiten verfügt. Weder FIL Fund Management Limited noch sein Mutterunternehmen FIL Limited oder irgendein anderes Konzernunternehmen oder verbundenes Unternehmen übernimmt die Gewähr dafür oder erklärt, dass die Informationen auf dieser Website zutreffend, vollständig oder für jedwede Zwecke geeignet sind.

Ich erkenne an, dass weder FIL Fund Management Limited noch FIL Limited oder ein anderes Konzernunternehmen bzw. verbundenes Unternehmen für etwaige Verluste haftet, die direkt oder indirekt aus einer auf dieser Website beschafften Information resultieren. Durch Annahme dieser Erklärung bestätige ich auch mein Einverständnis mit den Nutzungs- und Geschäftsbedingungen dieser Website, die ich gelesen und verstanden habe.

Fidelity International, das Fidelity International Logo und das F-Symbol sind Markenzeichen von FIL Limited, einem nach dem Recht der Bermuda-Inseln eingetragenen Unternehmen.

Bitte beachten Sie, dass die FIL Fund Management Limited von der Finanzmarktaufsicht Liechtenstein weder zugelassen noch beaufsichtigt ist.

Diese Website präsentiert Informationen in englischer und deutscher Sprache. Als professioneller Anleger akzeptiere ich hiermit, Informationen in mehr als einer Sprache zu erhalten.

Wenn die obige Erklärung zutrifft, klicken Sie bitte auf „Ich stimme zu“, um auf die Website zu gelangen.

European Parliament elections: Bond investors brace for a populist takeover

by Tiago Parente, Andrea Iannelli, Ben Moshinsky and Adnan Siddique

Published 26 April 2019

Political uncertaintyEuropean electionsPopulism

Elections to the European Parliament usually come low on the list of political risk events to watch. But with a radical right wing on the rise in many European countries, the May 2019 vote is different.

A strong showing for populist groups has the potential to feed back into the national politics of member states, with ramifications for sovereign bond markets. It may also upend the status quo on Europe-wide finance, trade and budget policy, disrupting decision-making processes.

Timeline of European parliament elections and key ECB appointments

..
Source: European parliament, April 2019

Rise of the populists

In terms of scale, the European Parliament elections have a claim to being the biggest in the western world. Every five years, more than 700 members of the European Parliament are elected to represent around 512 million people across 28 countries.

While social democrat, liberal and centre right parties have dominated elections in the past, steadily declining participation rates have helped far right parties gain a foothold. Lower turnout, combined with a proportional representation system, favour non-mainstream parties. And this year momentum is with the hard-right.

Source: European Parliament, Deutsche Bank, Feb 2019

According to our ‘extreme case’ projections, populist and eurosceptic parties could capture more than 30 per cent of available seats in the 2019 EU parliament elections, leaving centre right and left parties in the minority for the first time. At the lower end of our projections the populists would still gain almost 25 per cent of MEPs.

The impact of populist parties is amplified by increasing coordination between right-wing groups, and the fragmentation of parties holding the centre ground. A large Eurosceptic contingent could be unified into a single populist group if Italian deputy prime minister, Matteo Salvini, succeeds in amalgamating the Europe of Nations and Freedom (ENF) party with the Europe of Freedom and Democracy (EFDD) party and the European Conservatives and Reformists (ECR). Such a coalition has the potential to be seriously disruptive. “Our target is to win and change the rules of Europe,” Salvini told a packed hall of supporters in Milan this month.1

..
Source: Fidelity International, April 2019. Centrist parties in blue.

The Hungarian ruling party Fidez, nominally a member of the centre right European People’s Party (EPP) but with eurosceptic leanings, also complicates matters. Under Victor Orban, the party has been sanctioned and warned about possible expulsion from the EPP, potentially robbing the centre right of 14 MEPs and tipping the balance of power further towards the extremes.

The UK has confirmed it will participate in the elections and will keep its 73 seats. At the time of writing, and according to the latest projections, around 32 of the UK’s seats would go to eurosceptic parties, with the other 41 split between Labour, Liberal Democrats, Scottish National Party, Change UK and other parties.

Sovereign feedback loop

A strong showing in Europe can increase the influence on policymaking within individual member states of nationalist or single-issue parties. The United Kingdom Independence Party, or UKIP, is a good example of how a fringe party can use European elections as a platform to break into mainstream national politics. Its 13 per cent share of the vote in the 2015 UK general election followed a strong showing in Brussels in the previous year. This is an established strategy, recognised and pursued by the parties on the extremes of the political spectrum.

..
Source: Fidelity International, April 2019. *Expected

Italy vulnerable

On day one of the results, fixed income investors will assess the outcome of the EP elections through the lens of the sovereign bond markets.

The Italian market is particularly at risk. It’s possible that Salvini’s Lega Nord party could use a strong performance in the EP elections to force a domestic general election to capitalise on its popularity. That could spark a loss of confidence among Italian bond investors concerned about undisciplined spending following a controversial 2018 budget, which relied on bullish growth projections to balance tax cuts and transfers, instead of structural reforms. Italy already has one of the largest debt-to-GDP ratios in the developed world, it faces demographic headwinds, and suffers anaemic productivity growth.

If the country were to enter recession while maintaining its current level of spending, Italy’s debt-to-GDP ratio could rise substantially, rather than follow the government’s projected decrease to below 130 per cent. Higher net bond supply to finance the government debt combined with a high debt load is likely to widen BTP spreads over bunds. And if the country loses its investment grade credit rating status (at BBB it is only one notch above sub-investment grade) at all four major rating agencies, the effects could be disastrous, although this is not our base case. Higher borrowing costs would be amplified as the ECB, an important buyer of BTPs, would be unable to continue its purchases as part of its Public Sector Purchase Programme.

Given the size of the Italian economy, the negative effects of a downgrade could spill over to other European markets, with volatility likely to spike as a result. Italy is the Eurozone’s third biggest economy and contributes around 11% of the EU28’s real GDP.

Contagion risks

While the impact of the 2018 budget clashes between Italy and the EU was contained to BTPs and did not extend to other peripheral countries, the same may not hold through today’s more strained macro environment. Italian banks have long held a large government bond exposure and are the main conduit of volatility from financial markets into the real economy. Other countries in Europe, however, are unlikely to remain immune, with France, Spain, Portugal and Belgium still particularly exposed to Italy through their banking sector.

Spain is often viewed as the most likely contender for Italian contagion, and it has its own problems with populism. The EP elections come one month after Spain’s general election (28 April) and are likely to fall in the middle of negotiations to form the next government. A strong performance in the EP elections could strengthen the hand of disruptive forces on the right, such as Vox, and on the left, like Podemos, in those negotiations. While Spain escaped contagion from Italy in 2018, a new political dynamic favouring populists could persuade the market to re-think Spain’s insulation.

..
Source: Fidelity International, April 2019. *Expected

The longer view

Should populists gain a sizeable standing in the parliament, the implications will go beyond national politics. Together with the EU Commission and Council, the Parliament is a key institution in the bloc’s decision-making mechanism. As such, further fragmentation of the Parliament’s centre parties would be a challenge to the process of consensus-building needed to ratify trade agreements, policies and laws. There are several areas where an impasse could be particularly acute.

A parliament dominated by nationalist interests may present an obstacle to finalising a full banking union and capital markets union, creating uncertainty around the future of EU financial integration. The completion of these policies would be important milestones in strengthening Eurozone financial governance and resilience.

Parliament’s assent is also needed on trade issues, for example in striking agreements with the US, China and Britain, once the latter leaves the EU. The US is agitating over its trade deficit with the EU, and a divided EU would weaken its hand in any renegotiation, hurting the block’s long-term economic growth prospects.

Meanwhile, the EP must approve the 2021-2027 EU multi-annual financial framework. EU budget talks are delicate and difficult at the best of times. Were the balance of power within the parliament to tip towards nationalists, even more uncertainty would creep in to the process, potentially leaving some EU programmes facing a future of underfunding. This could eventually harm the bloc’s competitiveness in areas such as scientific and technology advances in an increasingly competitive world.

Finally, the parliament has a role in overseeing the leadership of the European Central Bank. With a succession process for its president underway, the EP election could inject an element of uncertainty there, too. While this is not a central risk given the strong set of candidates, the process of hearings in the EP could turn fractious if populists build on their existing influence. More importantly for the future, the ECB is more effective when there is stronger, not weaker, institutional solidarity in the EU.

Conclusion

The European Union is being pulled in many different directions, and next month’s European Parliament elections could reflect these tensions. If radical parties increase their share of the vote, parliament will become a forum for intense battles between those who favour integration and those who seek to undo it.

A strong showing in the European Parliament elections by radical and nationalist politicians could have real ramifications for domestic politics, exacerbating the risks of moving away from the centre ground. This could weaken fiscal discipline in national budgets and have knock-on effects on funding costs and bond yields. It also has the potential to disrupt and delay policymaking at the EU level, increasing the risk that efforts to deepen financial integration stall.

While these effects mark medium to long-term concerns - and their impacts on bond markets may be diverse, difficult to isolate and to quantify - they are real risk factors. The EU elections could inject political risk into sovereign bond markets in the short and medium term, making the election results a ‘must-watch’ event for fixed-income investors, perhaps for the first time.

References

1Salvini aims high with populist alliance for Europe - Politico. https://www.politico.eu/article/salvini-aims-high-with-populist-alliance-for-europe/

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