Going into the new year, developments will continue to be shaped by the 3GDs, i.e. the Great Deleveraging in the United States, the Great Divergence in Europe and the Great Dynamics in emerging economies. Nevertheless, they imply three very different economic dynamics on a twelve month horizon. Regarding the world economy as a whole, we […]
The EU heads of state took a step toward banking union last week during the first day of the EU Summit. The decisions taken certainly do not represent a breakthrough, although they did help to ease investors’ nerves after concerns re-emerged recently. A summit held on 25 September between Germany, Netherlands and Finland seemed to […]
Several hurdles were removed on 12 September 2012 The German Constitutional Courtruling cleared the way for the launch of the European Stability Mechanism (ESM). Dutch parliamentary elections did away with the risk of a eurosceptic government in a core country. The European Commission ambitious proposal for bank regulation provides a road map towards a banking […]
Yves Bonzon, Chief Investment Officier, explains that the levels necessary to trigger quantitative easing measures in the US have not been reached, shifting the responsibility for growth to Europe and the political measures that will be discussed in September. The markets will be volatile until then and the preferred asset classes remain investment grade corporate […]
Friday’s economic news from Germany confirm that the only remaining European engine of growth is running out of steam: June’s Ifo Business Climate Survey fell to 105.3 from 106.9 in May. This is the second decline in a row. The deterioration is essentially due to a fall in expectations (see chart below) as its component […]
The June 2012 edition of Perspectives – titled “Political decision-making in Europe the main factor driving markets” – is now available. In this edition: • Editorial outlook: The moment of truth approaches • Macroeconomics: Eurozone crisis back with a vengeance • Strategy: Caution still the order of the day • Headline news from around the […]
Spain’s government has finally decided over the week-end to seek international assistance. The precise amount of the loan has yet to be determined but could be up to €100 billion. The following 6 points summarize how the Spanish government will accept EU assistance. 1. The Spanish government has finally decided to seek international aid to address […]
The ECB Governing Council decided yesterday to leave interest rates unchanged, as expected. Mario Draghi, President of the European Central Bank, leaked however to the press that a few members were in favour of a rate cut. His assessment of the economic situation was slightly more bearish than one month ago. The euro area appears […]
Deflationary forces continue rumbling menacingly in the background to developed economies. They stem from the significant deleveraging being pushed through, most strikingly in Europe which, according to our calculations, is probably running about 3 years behind the US in the whole process of dismantling the wall of debt. Deflationary pressures in Europe are being aggravated […]
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