FOMC statement: The tone of the Federal Open Market Committee (FOMC) statement was hawkish, with a focus on higher inflation risks and more aggressive policy tightening. There were notable changes to the statement: the Fed retired the word ‘transitory’ to
Omicron uncertainty; inflation certainty The resurgence of the virus cycle, central banks’ reactions to high inflation figures, and Evergrande’s unavoidable default have led to some volatility in the market, but these issues have not caused any major disruption. In the
Because of the 2015 Paris Agreement, the development of ESG investing and the emergence of net zero emission policies, climate risk is certainly the most important topic and challenge for asset owners and managers now and will remain so over
Omicron uncertainty; inflation certainty The resurgence of the virus cycle, central banks’ reactions to high inflation figures, and Evergrande’s unavoidable default have led to some volatility in the market, but these issues have not caused any major disruption. In the
Although its decarbonisation has been under way for several years now, as highlighted by the strong growth in renewable power capacities, the power sector still accounts for 38% of global energy- and industryrelated CO2 emissions. – The decarbonisation pace of
Understanding why we must shift from a linear to a circular model is key for our future. Hard law is being introduced in many countries, especially in the EU and is going to change the way companies can produce and
10 KEY MESSAGES FROM THE 2022 INVESTMENT OUTLOOK The road back to 70s narrative gains traction. Secular stagnation is a thing of the past, the “roaring 20s” – a new economic miracle – a dream. Global growth will return to
CROSS ASSET Investment Strategy The “real” puzzle Central banks are sticking to their temporary inflation narrative, even though the latest CPI readings support the “sticky” narrative. We think, investors should look for ‘real’ returns in credit offering higher yields, together
ESG and Sovereign Risk As recently as 10 years ago, ESG was considered a niche investment market reserved for the particularly conscientious investor. Fast-forwarding to today, ESG considerations have been placed firmly at the heart of the finance industry. Consumer
SPECIAL COP26 The Conference of the Parties (COP) was established with the adoption of the United Nations Framework Convention on Climate Change (UNFCCC) at the Earth Summit in Rio de Janeiro in 1992. Since the first COP in 1995 headed
2022 will mark a critical juncture on the road to a new economic and financial regime. Multiple coexisting transitions will drive the shift from the old to a new regime, that has already started in economic, social and geopolitical spheres,
ESG (environmental, social, and governance) investing has been making news headlines recently. With the rising adoption of ESG worldwide, regulatory scrutiny has started to intensify. The focus of this attention has been the assessment of what is effectively the integration
In this paper, we propose a new method to estimate nonfundamental demand shocks for green financial assets based on the arbitrage activity of exchange-traded funds (ETFs). By estimating the monthly abnormal flows into environment-friendly ETFs, we construct a Green Sentiment
Themes for Q4 and beyond for Europe Covid-19 cases are surging but the risk of generalised lockdowns is limited Robust Eurozone growth, will peak in 2021 and moderate in 2022-23
Like it or not, the alignment of the planets regarding inflation will last for a while. October saw the recognition of a more permanent than expected inflation, with the IMF officially stating that we are entering a phase of inflationary
As we enter the tail end of the Covid-19 recovery boost, authorities in developed markets are seeking to implement fiscal packages of varying degrees to control the eventual economic cool down. Much of the narrative has now shifted to the
Like it or not, the alignment of the planets regarding inflation will last for a while. October saw the recognition of a more permanent than expected inflation, with the IMF officially stating that we are entering a phase of inflationary
The return of inflation is clearly one of the top themes of 2021 and the post-pandemic economic revival. In addition to the temporary effects associated with supply chain bottlenecks (semiconductors, energy, copper, etc.) during a sudden upturn, there is the
CIO Views Markets responded to mixed data from the US and China and to the potential tapering from central banks. We are also seeing inflation (energy and food) and a deceleration in China. As a result, while staying neutral on
Equities have remained buoyant over the past weeks despite some challenges (China regulation, Afghanistan crisis), primarily due to the exceptional earnings seasons in the US and Europe. Looking ahead, we identify three main themes: the spread of the Delta Covid
Investors have enjoyed stellar performances over the last twelve months. A 60/40 traditional global equity/bond portfolio1 returned around 19% on a one-year horizon, well above even the rosiest expectations of the recovery from the Covid-19-induced slump. The S&P 500 is
Special Europe: invest in the recovery In a nutshell As the European economy is recovering from the largest economic shock of modern history, we are revising our growth and inflation assumptions to the upside. Although the path to recovery is
Equities have remained buoyant over the past weeks despite some challenges (China regulation, Afghanistan crisis), primarily due to the exceptional earnings seasons in the US and Europe. Looking ahead, we identify three main themes: the spread of the Delta Covid
The European economy is emerging from its worst economic slump since the Great Depression. As the vaccine rollout progresses quickly across the continent, mitigation measures and travel bans are being lifted, allowing growth to revive. As the European economy recovers,
The first half of 2021 has been witness to exceptional growth in demand fueled in large part fiscal stimulus and waning Covid-related restrictions. Latest data release indicates the major economies may be at the onset of high-water mark of economic
Over the past year, the Chinese government has instituted a variety of regulatory measures that have unnerved investors. There have been anti-trust measures against e-commerce giants, new data security laws to prevent companies from transferring information abroad, new capital requirements
The EU formally adopted in June its new objective of cutting the bloc’s greenhouse gas emissions by 55% by 2030 versus 1990. This represents a substantial increase in the bloc’s ambition compared to the previous 40% reduction target and sets
Global Investment Views The past weeks have confirmed that phase one of the ‘great recovery’ is now behind us. We have entered a new sequence: PMIs decelerating from their peaks and concerns about the spread of the Delta Covid19 variant
Today, all eyes are on Europe. While the strongest national European football teams are animating a great competition, which is also signalling a sort of return to normality for Europeans, investors’ appetite for European equities is back and for good
Waters appear calm, but there are strong undercurrents. Large economies are at different stages of their journey towards peak acceleration, but rising…
The Covid-19 crisis has transformed the world with far reaching consequences that markets are now starting to assess. The most important one being what will be left of the Great Recovery following the crisis. Different narratives are evolving at this
We are already reaching the peak of economic acceleration. What matters going forward is what will be left of this bounce in growth and inflation. Markets are pricing in a Goldilocks scenario: low inflation and higher growth at trend, but we will
US long-term yields have risen in recent months on expectations of strong economic growth fueled by fiscal stimulus. Eurozone long-term government yields have followed this movement in a limited way, as Eurozone economies have been hit hard by the Covid-19
We maintain the narrative and probabilities of our central and alternative scenarios. In our central scenario, equities outperform on the back of abundant liquidity, improving fundamentals and accommodative monetary policy. Vaccine-resistant virus variants, hawkish policy surprises and geopolitical tensions are
In the current post Covid-19 recovery phase, we see three main themes that multi-asset investors should focus on: one more tactical, in terms of risk allocation, and two more structural. – First, as the recovery advances, investors should embrace more
April started on a positive note for financial markets, after an exceptional first quarter, with divergent fortunes for equities and global bonds. Going forward, the progression of the recovery will likely be the key market driver, leading to greater divergences.
Rising UST yields amid hopes of economic recovery are causing the markets to question whether the Fed will pause its bond-buying programme. We don’t think the Fed will change its accommodative stance in the near term. However, investors should prepare
Rising UST yields amid hopes of economic recovery are causing the markets to question whether the Fed will pause its bond-buying programme. We don’t think the Fed will change its accommodative stance in the near term. However, investors should prepare …
The proliferation of crypto-currencies (CCs) and the popularity of these assets among investors has led us to question their nature, function, valuation and potential development. CCs are at the crossroads of technological innovation, finance and monetary policy.
The rotation towards value is a key theme of our 2021 investment outlook. As the US economy moves towards reopening and a return to normalcy, we expect an overly accommodative Federal Reserve (Fed) to let the economy ‘run hot’ in
The case for investing at the top of the capital structure. From an investment perspective, which trends do you envisage for private debt markets in 2021? Market trends appear favourable for the asset class on both the supply and the
After decades of sound performance, doubts have been cast on the ability of the equity value strategy to keep delivering in the aftermath of the 2008 Global Financial Crisis. Indeed, in a context marked by low yields, sluggish growth and subdued inflation …
This article assesses the communication of the European Central Bank (ECB) using Natural Language Processing (NLP) techniques. We show the evolution of discourse over time and capture the main themes of interest for the central bank that go beyond its traditional mandate of maintaining price stability, enlightening …
A year of divergence 2021 outlook 2020: an extraordinary year 2021: an unsynchronised recovery After an unprecedented 2020 marked by the most severe recession in modern history and a global pandemic still underway, we enter 2021 with a mildly positive
As widely expected, the core of the deal is a zero-tariff/zero-quota free trade agreement for goods. This means that EU-UK trade will be much less affected than if the UK had ‘crashed out’ without a deal, to be governed solely
2020 has been an unprecedented year in modern history, with the Covid-19 pandemic leading to the deepest global recession post World War II that has affected the most countries simultaneously since the 1870s (World Bank). This big shock is not
Interest rates are at an all-time low, and even if inflation eventually picks up, it could take some time. Central banks, the first pillar of the investment cycle, are adjusting and are resolutely accompanying governments in this final battle against
2021 Outlook and Beyond The US election outcome and the hopes that the Covid-19 vaccine will be a tangible reality by the end of the year or the beginning of 2021 bode well for a worldwide economic recovery. China is
"Marked by the most severe recession in modern history, 2020 was an unprecedented year. With the global pandemic continuing, we enter 2021 with a mildly positive outlook for the upcoming recovery, but with the assumption that the path to pre-crisis
Quarterly Update As noted in our previous reports the much-awaited global recovery from the onset of Covid-19 is facing significant headwinds. As the fallout from the crisis becomes clearer in scope and view, ensuing challenges remain daunting. The interplay between
