Budget outlook less bad, but still awful

Yesterday the Congressional Budget Office, the nonpartisan that provides economic and budgetary analysis, released its most recent long-term budget outlook. This outlook includes updates for changes in legislation and executive actions, economic developments, and demographics. The most recent outlook reflects an improvement from last year’s version, but still paints a bleak picture. Under the current law, which envisions the expiration of the Tax Cuts and Jobs Act at the end of 2025 (which will ...

Tariffs put a damper on the markets

Uncertainty about US tariffs (amounts, products and countries affected, duration, etc.) will continue to fuel investor fears well into next week. April 2 will be D Day for tariffs. That said, there is other news that should not be overlooked. France’s 2024 budget deficit came in narrower than expected (-5.8% against a forecast of -6%), Spain’s budget deficit also decreased (-2.8% excluding exceptional expenditure linked to the floods), and the UK’s budget was revised to remain in line with tar...

Les tarifs jettent un froid sur les marchés

Les questions relatives aux droits de douane des Etats-Unis (montants, produits et pays affectés, durée…) vont encore attiser les craintes des investisseurs une bonne partie de la semaine prochaine. Le 2 avril sera le D Day tarifaire. Toutefois, d’autres nouvelles ne doivent pas être oubliées. En France un déficit budgétaire 2024 meilleur   qu’attendu (-5,8% contre -6% prévus), en Espagne bien meilleur aussi (-2,8% hors dépenses exceptionnelles liées aux inondations) et une révision des mesures...

RBA Monitor: Status quo in April as RBA sticks to data dependency whil...

The Reserve Bank of Australia (RBA) is expected remain vigilant in its April meeting given the still stubborn inflation data while the economy decelerates pushing for more fiscal support. On the former, while the trimmed mean CPI, a measure of underlying inflation, fell back to +2.7% YoY in February, after slightly picking up in January (Chart 1). However, services inflation remained at +3.6% YoY in February, which is why inflation has been elevated over the past few years. One of the main reaso...

欧州の防衛を巡る新たなモメンタムは、　フランスにとってチャンスか

Tariffs weighing on investors’ sentiment

Hong Kong's pivotal role in RMB capital flows

China’s yuan has been weakened due to a number of factors including the trade war escalation although it has recovered somewhat from late January as the dollar weakened, and more cross-border portfolio flows have entered China’s equity market. While there has been concern over whether China will use the exchange rate to offset part of the tariffs and maintain export competitiveness, the recent improvement in sentiment and investment into equities has offset the depreciation pressure. In this not...

Les tarifs pèsent sur le sentiment de marché

Partial ceasefire in Black Sea – what consequences

Cessez le feu (partiel) en mer noire, quelles conséquences ?

Ceasefire in Ukraine – Energy Market and Macro Implications

The election of Donald Trump has placed a negotiated settlement to the Russian invasion of Ukraine on an accelerated timeline – although a sustainable peace still appears far away.The abrupt shift in US foreign policy has been a bruising experience for Ukraine and considering both Presidents’ former careers in television, it was perhaps fitting that the clear strains in the relationship between Trump and Zelenskyy were broadcast live to the global press from the Oval Office. This marked a low po...

UK Spring Statement: small fiscal margins restored

The deterioration in growth forecasts along with higher borrowing costs have left the government with £4 .1 bn in deficit in 2029-30 under the government’s plans from October. Following a downward revision to GDP growth this year and with the fiscal buffer exhausted , the finance minister Reeves has had no other choice than to make fiscal changes to stay on track to meet her non-negotiable goals . Policy changes, incl. welfare reforms and reductions to day-to-day departmental...

ユーロ圏：インフレ率の減速は ECB の利下げ継続にとって十分か

Optimism in US equities a tough nut to crack

L’optimisme des actions US est dur au mal

Euro area: Composite PMI slightly improved in March

The euro area composite PMI slightly improved in March, to 50.4 (7-month high) from 50.2, but below consensus expectations (50.7). The recovery was led by the manufacturing sector while services disappointed (see chart 1 ). The composition of the report is mixed. On the one hand, t he index for “Future Output” declined to 5 6.9 from 5 8.0 while the “New Orders” index remained broadly unchanged around 49 (see c hart 2 ). On the other hand, t he “Employment” index slightly imp...

Negative bases could weigh on the new iTraxx after the roll

Some recovery has been seen in the Highest Beta credits last week (-6 bp for € HY , -4 bp for $HY and €AT1s ) . However, on a monthly basis those are still the main underperformers (+45bp for US$ HY, +31bp for AT1s) . CD S -wise, it is worth noticing that t he index roll went pretty smoothly during the first day (20th March), but fears of US recession came back last Friday driving some large buy ers of protection (+8bp for the iTraxx X-Over S43 at the close), while the CDX NA HY also w...

Targeted tariffs are back

Le retour des tariffs ciblés

From Bund scarcity to abundance

Germany's recent fiscal package is set to significantly impact its future funding landscape. With an allocation of €100b n for the Climate and Transformation Fund, €100 bn for Länder spending, and €300 bn for federal infrastructure projects, the total gross supply is projected to increase from €439 bn in 2024 to €678 b n by 2030. The DFA has indicated that while there will be no immediate rush to boost funding volumes, the DMO will reintroduce 7 Y Bunds in H2 2025 to address potential fu...