Japan’s still negative neutral rate points to a very slow exit from ul...

The Bank of Japan (BoJ)’s monetary policy has been an outlier among major global central banks. It was not only the last central bank to end the unconventional monetary policy tools but also the first one to actively use those tools from the 90s.With declining neural rate, the BoJ confronted the zero nominal lower bound, a belief that the policy rate cannot fall below 0%, when the economy suffered from a prolonged deflation. In fact, our latest Cross-Expertise* revealed that Japan’s neutral rate...

Global public debt set to increase by 5.6pp of GDP to 99% by 2029

Our new $ rates scenario

The start of this year saw a reversal of the trend on dis inflation, a reassessment of rate expectations by the market and finally a change in tone from Fed speakers, including J.Powell . We changed accordingly our $ rates scenario for the next 18 months and now expect our 2-year OIS $ to end 2024 at 4.15%. The 10-year UST should decrease from 4.6% to 4.45% in September and 4.30% in December. In this scenario, the 2-10y segment of the UST curve should become flat during Q4 this year.

Dette publique mondiale : +5,6 points de PIB à 99% d’ici 2029

フランスの財政を七つの問いで検証すれば

Buy the dip?

Buy-the-dip ?

China continues to dominate an expanded BRICS

The origins of BRICS — a bloc comprising Brazil, Russia, India, China, South Africa and, as of 2024, new members Egypt, Ethiopia, Iran and the United Arab Emirates — can be traced back to a 2001 publication by Goldman Sachs economist Jim O’Neill titled ‘Building Better Global Economic BRICs’. O’Neill argued that Brazil, Russia, India and China were poised to play an increasingly significant role in the global economy.His prediction was that by 2050, these countries would collectively account for...

Powell validates higher for longer scenario

Powell valide le “higher for longer”

The ECB is taking a risk by cutting interest rates as early as the spr...

Euro-zone inflation is apparently under control (headline inflation was 2.4% in March 2024). The ECB has announced quite clearly that it will start cutting interest rates before the summer of 2024. But in reality, euro-zone inflation is much higher than headline inflation. When looking at: The GDP deflator (resulting from unit labour costs and profit margins); The negative contribution of import prices to the rise in consumer prices; Inflation excluding energy and unprocessed food; Prices of ser...

La BCE prend un risque en baissant ses taux d’intérêt dès le printemps...

L’inflation de la zone euro est en apparence maîtrisée (l’inflation totale est de 2,4 % en mars 2024). La BCE annonce assez clairement qu’elle va commencer à baisser ses taux d’intérêt avant l’été 2024. Mais en réalité, l’inflation de la zone euro est nettement supérieure à l’inflation totale. Lorsqu’on regarde : le prix du PIB (qui résulte des coûts salariaux unitaires et du taux de marge bénéficiaire) ; la contribution négative des prix des importations à la hausse des prix de consommation ;...

China’s ‘new productive forces’ risk overcapacity bubble

China’s Two Sessions – the National People’s Congress (NPC) and the National Committee of the Chinese People’s Political Consultative Conference (CPPCC) – took place from March 4-11 in Beijing. This year, the Two Sessions have been particularly important for understanding where the Chinese economy is heading, as new Premier Li Qiang delivered his first “Work Report,” which marked the beginning of a new economic era.The Work Report signifies a departure from the previous decade under Premier Li K...

Entrenched inflation more powerful than risk-off

La Chine exporte ses capacités excédentaires : quelle réaction de l’Eu...

La Chine a des capacités excédentaires de production dans l’industrie manufacturière, particulièrement dans la production de voitures et de batteries électriques, de matériel pour la transition énergétique (cellules photovoltaïques, éoliennes…), dans l’acier… Les coûts de production étant plus bas en Chine qu’en Europe, et les aides publiques permettant aux producteurs chinois de vendre à des prix bas, il y a clairement la menace d’une conquête importante de parts de marché par les entreprises c...

La crainte d’une persistance de l’inflation, plus forte que le risk-of...

India's economy can overtake China's if it can stay on track

Will India's gross domestic product ever surpass that of China? Ten years ago, no one would have given this question much thought. But times are changing. The Chinese economy may now be more than five times larger than India's, but India is growing much faster than China, and no one expects that to change anytime soon.Already, since 2010, India's economy has overtaken those of the U.K., France, Italy and Brazil in size. Japan, which last year slid behind Germany to become the world's fourth-larg...

Heightened tensions across Middle East back on markets’ radar

Why is the real estate sector in trouble at a time when stock market i...

In the United States and the euro zone: There is a residential real estate crisis ( falling construction and home sales, weak mortgage lending, etc.); Stock market indices are breaking records. How is this possible? This situation can be explained as follows: Real estate activity depends on nominal long-term interest rates, while share prices depend on real long-term interest rates; Liquidity is still very abundant, but is not financing real estate (mortgage lending is weak ), it is rath...

Pourquoi l’immobilier est-il en difficulté alors que les indices bours...

On observe, aux États-Unis et dans la zone euro : une crise de l’immobilier résidentiel (chute de la construction, des ventes de logements, faiblesse des crédits à l’immobilier…) ; des indices boursiers qui battent des records. Comment cela est-il possible ? Les explications de cette situation sont les suivantes : l’activité de l’immobilier dépend des taux d’intérêt nominaux à long terme, les cours boursiers dépendent des taux d’intérêt réels à long terme ; la liquidité est encore très abondant...