In the enlightening research titled "Why living wages should be considered a driver of human capital value, not a cost," the author dives deep into the intertwined complexities of wages, human rights, and sustainable development. Amidst the aftermath of a
Markets had a “grumpy August”. Bond yields rose in response to the US still growing too fast, while the confirmation of deflationary risks in China – and the lack of policy response – dampen investors’ animal spirits. Euro area softness
David Page's "Ahead after the first half…" provides a meticulous analysis of global economic activities for the first half of 2023. Economic growth, especially in North America, has shown unexpected resilience. Even as headline inflation numbers fall across both developed
In the macroeconomic realm, growth dynamics displayed a mixed bag with North American growth surpassing anticipations, while European growth experienced a decline and Asian economies like Japan and China showed varied results. Inflation trends seemed clearer, with disinflation becoming dominant
The article "Understanding and Responding to the Human Cost of the Green Energy Transition," by AXA Investment Managers, puts the spotlight on the intricate relationship between the global transition to renewable energy and its often-overlooked environmental and social implications. Hidden
In "Leaky Pipes," AXA Investment Managers address two key aspects impacting the financial landscape. The first being the shift in emphasis to the duration of restrictive monetary conditions, due to "non-decisive" data flows. The firm characterizes the situation as a
As key event risks like bank turmoil and the US debt ceiling issue have faded, focus returns to cyclical dynamics according to AXA Investment Managers. Despite mixed economic signals and a revision of Eurozone's economic history to a mild recession,
The fallout from the Wagner Group rebellion has implications for global politics and economics, particularly in relation to the Ukrainian war. The prospect of a peace settlement favourable to Ukraine and Russian stability is challenging, indicating a prolonged commitment from
The latest 'Towards a Busy Summer' report from AXA Investment Managers shifts the focus to the Bank of England (BoE). Expected to raise the interest rate by another 25bps, the BoE has faced criticism for its cautious approach compared to
The article "Nearshoring in Mexico: Mirage or the real deal?" delves into the concept of nearshoring, where production and services are moved closer to their final markets, focusing on Mexico's potential as an attractive nearshoring destination. The author outlines the
In the report titled "Patchy disinflation will trigger policy divergence," AXA Investment Managers assesses the nuanced inflation scenarios in the US and Eurozone markets. The US is witnessing a gradual softening of headline inflation; however, core improvement is slow due
The main theme of AXA Investment Management's "What you know and what you must guess" is the exploration of Central Bank Digital Currencies (CBDCs) as a compromise between the technical benefits of cryptocurrencies and the mitigation of financial stability risks.
Driving impact in listed assets investments Impact investing has become a powerful approach to achieving financial returns while addressing the world's most significant social and environmental challenges. This essay discusses AXA IM's approach to impact investing in listed assets, which
AXA Investment Managers' report, "The Pitfalls of the Inflation Blame Game," critically examines the European Central Bank's (ECB) emphasis on profit margins as the main factor driving persistent inflation. The report acknowledges the acceleration of core inflation in the Euro
The global banking sector is currently facing a challenging time, with banks in the United States adopting a precautionary mode. Meanwhile, the Federal Reserve seems to be prepared to reconcile with a credit crunch, as long as it's not too
Market reactions to the ongoing banking turmoil resulted in a significant downward revision of expectations for the policy rate of both the Federal Reserve and the European Central Bank (ECB). The market expressed its skepticism regarding the central banks' ability
The US authorities took out the “big guns” and acted decisively before the market open to contain the spill over effect from the demise of SVB (now accompanied by Signature Bank) using a two-pronged approach. First, they will “make good”
The February inflation data vindicates the European Central Bank (ECB) hawks. We remain however concerned with the “financial channel”: the January batch for loans confirms the credit impulse in deeply negative. We look at Sweden and the UK as “canaries
Key points Water stress is a matter of availability, quality and access – and can unevenly affect countries, industries and individuals We think there may be particular risks in emerging countries where agriculture and industry can demonstrate high levels of
On one level, it is easy to understand the scale of emissions from a company’s operations. If a factory is pumping out millions of plastic widgets, we can measure the greenhouse gases (GHGs) produced as it does so, and the
This week we want to take a step back from assessing cyclical conditions and second-guessing central bankers to take a look at the transatlantic relationship, spurred by a view “from the outside”, a long essay by Ding Gang, senior editor
An empirical analysis of ESG factors and pillars and the implications for European equity markets. Responsible investing has gained significant traction over the past decade, with environmental, social and governance (ESG) factors attracting greater attention2 . ESG scoring systems enable
Emerging markets are the most at risk from the effects of climate change and the immediate effects of war in Ukraine. This is leading to potentially damaging social impacts, including food insecurity and rising inequality. Major gaps remain in the
Potential short and longer-term impacts of the Russian energy shock The Russian invasion of Ukraine has prompted a period of global realignment – and it is hard to gauge the extent of this even seven months into the invasion. A
Russia’s invasion of Ukraine has had a profound impact, but the impact on global growth is uncertain. Direct trade links, particularly beyond Europe are small, but broader global demand may weaken. Elevated energy prices and tighter financial conditions look likely
Ben Bernanke eloquently expressed the central banks dilemma when dealing with an exogenous price shock: “monetary policy cannot offset the recessionary or inflationary effects of increased oil prices at the same time”. It must choose. He also proposed a qualitative
Major political economy shifts often coincide with wars or preparation of wars. They do not simply affect how resources are affected to defend against external threats. They also shape priorities on civil spending to maximize internal social cohesion. Building a
Lingering COVID-19-related supply-side disruptions, alongside a significant rebound in consumer demand, are producing supply bottlenecks and an inflation rate not seen for decades. We expect 2022 to be a year of gradual absorption of the pandemic shock, with robust but
Macro outlook: Compression, decompression, absorption Key points We expect pressure on global supply to gradually decline, contributing to a slowdown in inflation This would allow central banks to maintain a prudent approach to the pace of policy normalization It has
Klimaatverandering & de pensioensector – een poldermodel: De grote rotatie van Nederlandse pensioenbeleggingen valt samen met 'deep cleaning' en 'deep greening' van portefeuilles. 'Code rood voor de mensheid.' De dreigende boodschap van het recente klimaatrapport van de IPCC, het klimaatpanel
After a year of tepid primary issuance – held back by the global pandemic – activity in the Chinese green bond market came roaring back in 2021. The supply of new bonds jumped to a record of $60.7bn year-to-date, crowning
Climate change is back at the top of the risk ranking We must be willing to act now to prevent irreversible damage, in spite of the unknown variables and risks. Among experts, climate change has returned to the top spot
The cost of climate change: Action versus inaction Key points The present global consensus to reduce greenhouse gas emissions to net zero will require immense investment Investment spending is not a cost but will boost activity. Costs will reflect increased
Theme of the month: EU Fit for 55 In July, the EU announced “Fit for 55” – a suite of measures to deliver a 55% reduction in GHG emissions by 2030 from 1990 levels. It included an enhancement of the
If the world is going to limit global warming to +1.5°C from pre-industrial times, as set out in the Paris Agreement, global carbon emissions need to hit net zero by 2050. Every company will have a unique pathway as they
In hindsight, Jay Powell is probably very happy to have been so elusive at Jackson Hole on the timeline for “tapering” after the disappointing US job numbers for August. It is not the first time this year that payroll data
Sweeping regulatory changes in China have caught markets off guard lately and prompted confusion about Beijing’s intention behind actions that seemingly contradict its longterm strategy of building a high-tech and knowledge-based society. However, beneath what appear to be uncoordinated actions
Thematic equities in focus: After the rotation witnessed in Q1 2021, the second quarter was quieter, with elements of the inherent market volatility having subsided. However, investors continue to have questions around the prospect of inflation as economies continue to
Thematic investing is no longer niche. Assets in these funds have grown at an annual rate of 37% since 2018, but the unprecedented events of 2020 in the wake of the COVID-19 pandemic significantly boosted this growth to
Tourism has been one of the sectors most affected by the COVID-19 pandemic. Governments worldwide imposed strict movement restrictions and closed borders in the hope of stopping the spread of the virus. According to the United Nation’s World Tourism Organization,
Europe is re-opening. The summer of 2020 is probably going to be the point of reference to gauge the magnitude of the looming economic rebound. The “mechanical recovery” could be spectacular again this year (assuming no bad Covid news). Indeed,
Deciphering Europe’s ambitions, actions and ability to reach net zero: The European Union (EU) has long led the world on climate action and policies. In December 2019 it pushed the boundaries again, unveiling the European Green Deal and its ambition
The European Union’s bid to create a common framework to support the Green Deal is also an opportunity for asset managers. Climate change is arguably the greatest challenge the world currently faces. Delivering on the 2015 Paris Agreement goal to
In the second piece of our three-part report1 , we discussed the micro and macroeconomic impacts of China’s green transformation. While it is difficult to precisely quantify these impacts as China transitions to a carbon-free economy, we do know that
President Joe Biden signed the $1.9tn American Recovery Plan into law this month, adding to the $0.9tn stimulus in late 2020. Debate is turning to the next bill on longer-term infrastructure, clean infrastructure and inequality measures …
Beyond the immediate challenge of the pandemic, the US-China relationship is the main source of global instability. On this front, the newsflow is not encouraging. The meeting in Anchorage between the US Secretary of State and National Security Advisor with their …
Chancellor Rishi Sunak delivered only his second Budget, but the first after the full realisation of the impact of the pandemic on the UK economy. Amidst much speculation that he would tighten fiscal policy to address a large deficit, the Chancellor delivered a dynamic …
Keynesians were fairly united when they were in the policy wilderness, but now that their views are dominant and they can finally seize the levers of macro policy, dissent is emerging. Lawrence Summers is taking issue …
Entering the World’s Second Largest Bond Market China’s bond market reached $17 trillion in Q3-2020, making it the world’s second largest market after the US. The low market cap to GDP ratio compared with other markets suggests still significant growth
COVID-19: Data privacy risks and potential opportunities Social sensitivities around personal information held by external parties, particularly technology firms, has rapidly grown in recent years – and it’s a concern which has escalated in the wake of the COVID-19 pandemic.
