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.
Climate Alignment Principles The Paris Agreement set out to limit the increase in the world’s average temperature to at most 2°C above preindustrial levels and to pursue efforts to hold it to 1.5°C. The Task Force On Climate-related Financial Disclosure
As 2020 is drawing to a close we want to take a step back and discuss the return of “big government” which we think may be a lasting legacy of the ongoing crisis, even if it did not start with
Responsible Investment The COVID-19 pandemic has become a test of companies’ sustainability credentials. It has served to sharpen public and investor scrutiny of environmental, social and governance (ESG) practices and we have observed that … The COVID-19 pandemic has put corporate
We explore this week the possible “exit strategy” from the ongoing extraordinary fiscal and monetary stimulus. Drawing on Olivier Blanchard’ recent research, we argue that the current EU fiscal surveillance framework may … Key points The current EU fiscal surveillance
President-elect Biden to face a divided Congress Developments continue since the US Presidential Elections last Tuesday, but over the weekend a wide range of news agencies have declared Joe Biden to be the winner in Pennsylvania, a state carrying 20
Of course, the impact of next week’s elections in the US goes well beyond the economic and financial realm, but from our narrow angle, we will follow the results across two dimensions. One is volatility: whether a winner emerges quickly
Research & Strategy Insights Considering the rise in government debt in key developed markets As cases of coronavirus appear to be on a rising trend again in the US and have picked up sharply across Europe, negative risks to the
After some U-turns from the US President and although discussions are continuing, no deal has been found on a new fiscal stimulus package. The Fed has been very explicit on the necessity of a timely and comprehensive additional budgetary push
Impact Engagement Principles AXA IM believes that significant positive societal impact can be generated through listed assets investment strategies. This is the case for capital allocation into best-in-class companies, and for engagement with companies where there is scope for change.
The Payroll data for September confirmed that the recovery of the US labour market is stalling. The fact that employment failed to grow outside the hospitality sector suggests the difficulties go well beyond the direct impact of Covid-fighting restrictions. Labour
Al drukt de covid-19 pandemie de economische groei en inflatieverwachtingen, centrale banken en overheden zetten hier steeds verdergaande stimuleringsmaatregelen tegenover. In combinatie met trends als deglobalisering, kan dit een structurele kanteling in gang zetten die de inflatie juist op een
Research & Strategy Insights The sense of disappointment on the state of the recovery is particularly acute in Europe, where the traditional macro indicators, such as the PMIs or the forward-looking components of the national surveys, are already pointing to
Monthly Op-ed The recent dataflow is consistent with our base case: the world’s economy is not experiencing a “V-shape” recovery, but rather is following a “swoosh” trajectory in which after an initial spectacular rebound, growth slows. Focus is again on
Global Macro Monthly US President Donald Trump has already laid claim to the fastest economic recovery in US history. In terms of quarterly growth rates, this will surely be the case. Following the steepest contraction on record, data in Q2
Some regions of Europe are returning to lockdown – for instance some districts of Madrid badly hit by the second wave of the pandemic. Yet, for now these lockdowns are very different from the ones imposed in March and April:
Key points The divergence between a decisive Fed and a more hesitant ECB is an interesting debate but it hides the fact that on both sides of the Atlantic monetary policy through its traditional transmission channels is facing diminishing returns.
By and large the dataflow continues to point upward for the global economy but as we expected the spectacular rebound of early summer is not sustained, with private sector job creation slowing down in the US and the Euro area
Biodiversity plays a crucial role in protecting our health. It is only by understanding and respecting its limits that we will maintain the ecosystems that ensure our survival. Human activity is a growing threat to our life support system and
Locking in supply chains requires continued reforms and opening up After decades of rapid growth, the progress of globalisation has slowed since the global financial crisis, with its fate further complicated by rising protectionism, political interference and the COVID-19 outbreak.
The bad news on the pandemic front in Europe are offset to some extent by the recent experience on the other side of the Atlantic. There, in the late spring hotspots, the propagation of the virus has been curbed again
Dutch Pension Industry €1.5 trillion ESG ‘Green Swan’ The €1.5 trillion Dutch pensions industry, the largest in the European Union, and the fourth biggest in the world, is driving forward in adopting ESG (environmental, social and governance) principles to colour
De outperformance van duurzame beleggingen gedurende de Covid-19 crisis in combinatie met het groeiend aanbod aan duurzaamheidsinformatie en kwantitatieve methoden om deze in portefeuilleconstructie om te zetten, versnellen de vergroening van het Nederlandse pensioenvermogen. En dat kan tot ver over
Just the beginning of a multi-year investment theme… Even though it feels like e-commerce has been around for a long time, just 11% of global retail sales are transacted online. 1 In our view, this should allow for many years
Just the beginning of a multi-year investment theme… Even though it feels like e-commerce has been around for a long time, just 11% of global retail …
