The Eurozone economy has stagnated over the last three quarters, although growth in the second quarter was marginally positive due to strong idiosyncratic growth in one or two smaller countries. The countries that are more dependent on services, such as
The text "Global Investment Views – Divergences persist: US resilience vs China weakness" paints a comprehensive picture of global economic dynamics in August. While the US showcased its economic mettle, largely driven by fiscal stimuli and business investments, China experienced
A Dive into Collaborations and Market Dynamics The IFC and Amundi's partnership remains at the forefront of championing the growth and integration of green bonds in emerging markets. Despite facing an unstable global economic environment and experiencing the first-ever annual
Unraveling Africa's Climate Paradox Despite contributing to less than 3% of global carbon emissions, Africa is disproportionately affected by the devastating consequences of climate change, becoming the least climate-resilient region globally. While the continent grapples with the adverse impacts of
The recent performance of risky assets can be attributed to optimism, even amidst an uncertain economic backdrop. Notably, US headline inflation is easing, but its core measure remains stubborn, holding significance for monetary policies. European and UK indicators suggest a
The research "Emerging market resilience paves the way for new opportunities" by Monica Defend, highlights the robustness and potential of emerging markets in the current economic climate. Even with concerns surrounding China, emerging markets still demonstrate a growth edge over
The central theme of the 2023 Amundi World Investment Forum (AWIF) revolves around the transformative period the global economy is undergoing. Emphasizing the significance of this metamorphosis, the report touches upon the need for investors to adapt and evolve. While
In "From Climate Stress Testing to Climate Value-at-Risk: A Stochastic Approach" by Amundi Institute, a novel framework for climate stress testing is introduced. Diverging from conventional models primarily aimed at the banking sector with a top-down perspective, this paper brings
In "Geopolitical shifts and investment implications", Amundi outlines the transformative geopolitical dynamics that the world is witnessing. US-China tensions and the Russia-Ukraine war are key drivers, pushing the global balance towards a steady decline in relations between the US, China,
In "Don't ignore the economic weakness ahead", the author discusses the overall economic landscape, particularly the interplay between optimistic market sentiment and underlying weaknesses. An examination of the US, Europe, and China highlights diverging economic conditions, with upgraded growth forecasts
The evolution of financial technology (FinTech) has significantly transformed the accessibility of financial services. From the advent of internet-based trading in the 1990s to the increasing prevalence of mobile apps, robo-advisors, and social media, these digital breakthroughs have diminished the
The European insurance companies are in a state of flux with the changing financial environment. Opportunities like higher yield environment and closing of duration gap offer potential for growth, but headwinds like recession, lapse and liquidity risk pose challenges. Three
The main theme for the second half of 2023, as per CIO convictions, involves a narrow and uncertain growth path, an inflation slowdown, and monetary tightening close to its peak. Growth will decelerate, with a mild US recession, anemic growth
The report "Net Zero investing and its impact on a 60-40 allocation" addresses how global warming and the Net Zero transition profoundly affect investors. The author indicates that these changes will necessitate adjustments in asset allocation strategies, focusing on the
Amundi's research titled "Indian assets are poised for growth in investors’ portfolios" provides an optimistic view of India's economic and demographic future. Over the next decade, the country is projected to experience strong growth, indicating that Indian equities might outperform
In "Working Paper 142 I March 2023: Behavioural Biases Among Retail and Institutional Investors", the author provides an extensive overview of the main behavioural biases affecting both retail and professional investors. The paper categorizes these biases into two types –
The text provides an in-depth analysis of the global investment landscape in the wake of the IMF's spring meetings. The main theme of the text is the increasingly complex global economic climate, which is marked by several key trends including
Authored by Amundi, the research titled "Institutional Ownership and the Resolution of Financial Distress" embarks on an insightful exploration of distressed firms' choices between Chapter 11 and exchange offers. Deploying a comprehensive dataset that scrutinizes the financial and capital structure
"Bonds (and cash) definitely back on the radar screen" by Amundi encapsulates the convoluted dynamics of global markets in the previous month. These dynamics are influenced by various factors, including stress in the US banking sector, uncertainties surrounding the US
The report elucidates the ongoing disruption in the US regional banking sector after the March turmoil and the growing recession probability. It discusses conflicting signals between market expectations and equity valuations amidst potential Fed rate cuts and slowing inflation. As
Capital Market Assumptions March 2023 The text revolves around the exploration of asset allocation strategies against the backdrop of climate, social and geopolitical disruptions. The author highlights the consequences of the Ukraine conflict on the global energy supply and inflation,
The text provides a comprehensive exploration of green and social bonds within the context of Environmental, Social, and Governance (ESG) investing. It examines the existing premiums associated with these instruments, asserting a surprising lack of correlation between green and social
The report "Asset Class Returns Forecasts Q2 2023" discusses the effects of rapid Quantitative Tightening (QT) by Developed Market (DM) central banks. It suggests that the impact is evident across price dynamics and financial stability. However, core measures of price
Capital Market Assumptions March 2023 The annual edition of Capital Market Assumptions takes a more in-depth approach this year by considering the impact of climate change and social considerations on economic variables and asset class behaviors. The need to balance
In this short essay, we discuss the main theme of "A global assessment of the implications of recent banking sector developments." The text primarily focuses on the impact of recent banking sector developments on the global economy and central banks.
Amundi's report, "Financial stability concerns to tip the balance towards a US recession," unveils the escalating stress within the US banking sector, leading to increased funding costs and reduced lending. The author predicts a -1.1% shrink in the US economy
The text by Amundi highlights the impact of the war in Ukraine on the energy supply outlook and the path to net zero. The need for diversifying the energy supply mix has accelerated the shift towards greener energy sources, but
The SVB failure has put US regional banks under pressure, with concerns raised among investors and regulators. The main cause of failure was an asset-liability mismatch, resulting in materialized losses from sales of quality bonds that were trading down due
As the overall investment environment remains uncertain and the attractiveness of major asset classes is challenged, we believe it is appropriate to focus on currencies as a potential source of return and risk diversification for a portfolio. Indeed, FX has
Uncertainty over growth, inflation and corporate earnings persists, even though there has been a mild improvement on the economic front. These trends underscore the need to be active and well diversified. In equities, investors should stay cautious and consider playing
Biodiversity, human activity and corporates Biodiversity is part of the Earth’s natural capital and considered the cornerstone of a well-functioning planet. The many benefits to humans provided by natural capital are often integral to the provision of clean drinking water,
Focus to shift from inflation to growth risk This year, we expect the global economic environment to feature sluggish growth and an extended period of sustained high inflation. For the credit market, it will be a tale of two halves:
2022 ended in an abrupt fast-track reopening. In one month, China dropped most of its Covid-related restrictions, vowed to support the housing market more, and set pro-growth policies. We expect the Chinese economy to be separated from the global slowdown
The energy crisis resulting from the war in Ukraine has altered profoundly Europe’s economic performance and prospects. Countries have been affected unevenly, based on how dependent they are on Russian gas and oil. German industry has been particularly hard hit.
Central & alternative scenarios (12 to 18 months horizon) Monthly update We maintain the probabilities of our scenarios unchanged. Some of the risk factors we identify may occur in our central scenario, which is probably not yet fully priced-in by
Profit recession, tightening central banks (with divergences in forward guidance), and stillhigh inflation are primary market concerns. US inflation moderating has been a positive lately, but whether that deceleration will be sustained would decide the Fed’s stance, which in turn
A combination of sustained inflation and mounting recession fears, interlinked with the geopolitical situation, are the main drivers affecting the current and forward-looking macro environments. The bulk of the uncertainty is in the short to medium term. There is a
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
Global markets ended November on a positive note after months of generally poor returns. Equities were bolstered on hopes that central banks are heading closer to their terminal rates amid looming recession risks. In Euro terms, European equities recorded staggering
In this paper, we investigate the relationship between biodiversity and companies, through the lens of corporate bonds. We focus on acute biodiversity events and address biodiversity as a risk, considering its looming losses. We illustrate the material and tangible operational
The emergence of net zero emissions policies is currently one of the most important topics among asset owners and managers. It considerably changes portfolio allocation and the investment framework of both passive and active investors. The academic literature generally concludes
The FX regime of the last 20-25 years was characterised by a massive accumulation of USD reserves by export-oriented Asian countries, overall low FX volatility, and a still dominant role for the USD as a ‘public good’ facilitating global trade.
We expect global growth to slow significantly, with several countries across both developed markets (DM) and EM suffering stagnation, while others may face a slowdown at best. Global growth should land at around 2.2% in 2023, down from 3.4% in
Developments in Artificial Intelligence (AI) and machine learning have led to the creation of a new type of ESG data that do not necessarily rely on information provided by companies. This paper reviews the use of AI in the ESG
The good news is that AI tools are available now which can collect and analyse more information on ESG risks and opportunities than ever before. These tools improve the quality of data, analyse it effectively and create new exciting opportunities.
We maintain the content and probabilities of our scenarios. Note that some of the risk factors we identify may occur in our central scenario, which is probably not yet fully priced-in by markets. It would take a combination of risk
TLTRO repayments and redemptions will drive incoming ECB passive QT over the next few quarters. So far, banks have repaid a small amount of liquidity, while the ECB’s recent decision on remuneration of excess reserves has helped keep current excess
The cross-section of options holds great promise for identifying return distributions and risk premia, but estimating dynamic option valuation models with latent state variables is challenging when using large option panels. We propose a particle MCMC framework with a novel
This paper proposes a weighted group neural network model and reexamines whether treasury bond returns are predictable when real-time, instead of fully-revised, macro information is used. Real-time macro vintage data and news-based topic attention are taken into account. We find
CROSS ASSET Investment Strategy While a global recession may be avoided, we are likely to see growth deceleration and high inflation (higher cost of living) along with regional divergences. Thus, investors should consider moving to a more cautious stance on
