Our September Cyclical Forum was the first to be held in London, where the economic situation today reflects what’s happening around the world.
Focusing on high quality and liquidity when taking risk in portfolios will be key in 2023, as pressure on monetary policy remains intense.
Much of the global economy has transitioned quickly from an early-cycle recovery to a mid-cycle expansion that now appears to be rapidly progressing toward late-cycle dynamics.
European measures applied to mitigate the effects of the pandemic have contained the unemployment rate in Europe more than in the U.S. While recognizing economic risks from the rising number of COVID-19 cases in the U.S., our forecast sees this success ratio reversing before the end of the year.
The conditions for a relatively quick and robust rebound rest on the success in containing the virus within a reasonable horizon, and a well-calibrated economic policy response.
The Federal Reserve wants to avoid a crisis of confidence.
Germany’s economy is on the brink of recession. We expect a gradual recovery through the next year, but this is dependent on easing trade tensions.
Two decades after inception, the eurozone countries’ arranged marriage-type of union looks shaky at best, and now it is even more challenged by ongoing, global disruptive forces.
The European parliamentary elections may cause near-term market jitters, but we do not think the outcome will be a game-changer.
Eurozone GDP growth was very soft in the third quarter, coming in at 0.6% for the three months to September on a seasonally adjusted annualized basis, against consensus expectations of around 1.5%. While the release is disappointing, we caution against extrapolating this weakness in quarters ahead.
Over the next few years, financial markets could be set for a series of “Rude Awakenings,” as we forecasted in our latest Secular Outlook. The global economy is transitioning out of a post-crisis period characterized by remarkable stability, and the changes ahead could be jarring for investors.
We believe The New Neutral of lower-for-longer equilibrium policy rates remains a valid anchor over the medium term. The key drivers of low equilibrium rates – including demographic trends and the high level of leverage in the global economy – have not substantially changed since the financial crisis.
Economic recovery is in full swing but investors should remain vigilant of the long-term risks.
Centrist candidate Emmanuel Macron will be inaugurated as the next French president on 14 May, thanks to a clear win in the second-round runoff against the far-right candidate Marine Le Pen.
Markets breathed a sigh of relief today as the moderate centrist candidate Emmanuel Macron qualified for the second round of the French presidential election in two weeks, together with the far-right anti-establishment candidate Marine Le Pen.
Market nerves in anticipation of the French presidential elections in April and May 2017 have driven a spike in 10-year French and Italian government bond spreads, which have climbed 30 to 40 basis points (bps) in recent weeks (to 75 bps and 195 bps over bunds, respectively).
With around 60% of voters opting for a “no” and nearly 70% turnout, Italians on Sunday firmly rejected a constitutional reform that would have removed power from the Senate and left the lower house as the key legislative chamber.
