The monetary policy procyclicality: a new source of concern


Central bankers are progressively adopting a pro-cyclical behavior. The global growth momentum is now lower and central banks’ strategy now have a restrictive bias. In the US, Canada, UK and in many emerging markets, central banks’ rates are higher than at the beginning of the year. This has already changed… Read More »

Should Italian yields really be more Greek than Spanish?


It’s been nearly five months since the Italian general elections, with the result and the process of forming a coalition government eventually leading to the steepest selloff in BTPs we’ve seen for a long time, and the spread to bunds touching levels not seen since 2013. At the time there… Read More »

Economic Data Suggest Growth Rebound Forthcoming


Latest economic data signal a rebound in activity in the Eurozone – surveys signal 2.3% GDP growth – and we believe that growth in the second half will remain solid, with output growing above potential. A main driver is domestic demand, which is improving, and the latest services PMI survey… Read More »

Markets: what is the outlook for Q3 2018?


Global economy remains on track in 2018-2019 Despite the relentless media hype focused on a downtrend in economic indicators, global growth remains on track for now and the IMF expects it to reach 3.9% in 2018, representing a modest annual improvement of 0.1%. The impact of US protectionist measures and… Read More »

Trade Turns into War


The first salvo in the trade war was fired when the US administration decided to impose tariffs on steel and aluminium imports and on USD 34 billion of imports from China, and to restrict Chinese investments in the US. The US’s trading partners retaliated by targeting specific imports from the… Read More »

The global economic outlook in 3 graphs


The economic environment is changing. The world Markit index level in the manufacturing sector is still showing growth (index at 53 above the threshold of 50) but it is trending downward since the peak of December 2017. This new pace can be seen on the graph below where the world… Read More »

Mexico, change of course with Lopez Obrador

Philippe Waechter -

The Mexican election result was consistent with expectations. Lopez Obrador was the favorite with a large margin and he has won with 53% at the first round. Lopez Obrador was expected to win during the last two elections but the lack of transparency in the election process prevents him to… Read More »

EU’s Future on the Agenda at Brussels Summit


With migration and trade exacerbating the existential reform questions that will drive European Union (EU) members together or apart, we think this week’s summit should be measured in binary terms: does it further EU cohesion (and help to withstand future shocks) or does it advance the forces of fragmentation? In… Read More »