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Podcast: Macro Waves
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Covid-19 and the environment 9/8/2020

Covid-19 and the outlook for inflation 7/22/2020

COVID-19 causes balance sheet disruption 5/28/2020

Central banks: the need for re-assessing the objectives 2/26/2020

Negative interest rates and the paradox of saving 10/28/2019

On the Same Theme

Economic outlook: spring is in the air 4/9/2021
Economic statistics for the first part of this year are better than expected, including in Japan and the euro area. Moreover, this development is broadening in terms of sectors. Looking at business surveys, there is a growing feeling of beginning to “see the light at the end of the tunnel”.
Bitcoin’s buyer beware 3/15/2021
Based on an overview of the functions of a currency, cryptocurrencies should be considered as an investment instrument, rather than as an alternative to fiat money. Since the start of 2020, correlations between bitcoin and copper, equities and, in particular, breakeven inflation have increased. Probably, investors turn to bitcoin when inflation expectations are on the rise. Swings in investor sentiment also play a role. The extent of the change in the bitcoin price suggests that speculative waves are at work, driven by momentum buying and extrapolative expectations of price appreciation. When the fundamental value of an instrument like a cryptocurrency is very hard if not impossible to determine and when short-term price changes are a multiple of those observed in equity markets, caution should prevail when building and managing an exposure.
The bond market turmoil: causes and consequences 3/11/2021
In recent months, US government bond yields increased significantly on the back of higher inflation expectations but more recently, higher real rates have been the key driver. The latter development is in turn related to the prospect of massive additional fiscal stimulus. Unsurprisingly, the dynamics in the Treasury market have had global spillover effects, raising concern about an unwanted tightening of financial conditions.
Does the rise of bond yields call for yield curve control? 3/5/2021
In the US, the prospect of a huge additional fiscal stimulus against a background of a fast pace of vaccination, has recently caused a significant increase in Treasury yields.
The migration of risk in 2021 1/15/2021
Risk and uncertainty never disappear but their nature, intensity and economic consequences evolve over time. 2021 should be the perfect illustration.
Special Edition – 2021: hopes and challenges 1/7/2021
2021 is a year of hope with the arrival of vaccines. Health-related and economic uncertainty should ease significantly, and better visibility will help boost consumer and business confidence and thus drive economic growth. It is also a year of hope for the climate thanks to European initiatives and the prospect of a change of policy direction in the US. But these hopes bring challenges. How will we manage government debt? How might financial markets react if growth surprises on the upside?
What difference will the pace of vaccination make for the economy? 1/7/2021
The introduction of vaccines will enable the global economy to make the shift from a stuttering recovery, shaped by a series of lockdowns and their relaxations, towards a steadier growth trend. A key factor will be the gradual reduction in uncertainty, which will encourage households to spend and businesses to invest. The quicker we reach collective immunity, the stronger this economic momentum will be.
2020: Entering a new era 12/18/2020
From an economic perspective, 2020 will go down in history for obvious reasons – the consequences of the Covid-19 pandemic – but also because we have entered a new era.
2020 economic review: agile responses to the Covid-19 shock 12/11/2020
Covid-19 represents an exogenous shock to the global economy of unseen proportions in recent decades. The reaction has been swift and agile. Central banks have eased policy and injected liquidity whereas governments have put fiscal discipline aside and used their budgets to bring much-needed support.  This has softened the blow from the pandemic. What has also played a role is the agility of companies by adapting their production and/or distribution models to cope with the disruption of supply chains and the impact of restrictions on sales and by making it possible for a lot of their staff to work from home. Most importantly, the development of a vaccine brings hope at the end of a very difficult and challenging year. Vaccination should lead to a lasting economic recovery although questions remain about the possible longer-lasting impact of the pandemic in terms of unemployment and corporate as well as public sector indebtedness.
After celebrating the reduction in uncertainty, investors to focus on the growth outlook 12/4/2020
The latest OECD Economic Outlook reminds us that despite the prospect of a vaccine being widely available next year, the recovery should be very gradual. Yet, equity markets have rallied strongly in November, following the announcement of a highly effective vaccine. This suggests that the reduction in uncertainty, rather than a significant improvement in the growth outlook for next year, has been the driving force behind the reaction of investors. With the decline in uncertainty largely priced in, going forward, the focus will shift to the growth outlook. When will a sufficient number of people have received a vaccine? What about the pace of the recovery? The road ahead looks bumpier than the experience in November.

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