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The thin line between complacency and clairvoyance

Blind, complacent, cool-headed, driven by moral hazard, clairvoyant? Or should we follow the example of the Bank for International Settlements and call it “dissonant”? Which term best describes this summer’s market behaviour?

 
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New monetary season

For the financial markets, summer’s end is often the occasion for deep-felt upheavals. This summer, investors left on vacation filled with trepidation about the economic impact of Brexit, about robust job creations in the US and how they might change monetary policy prospects, and about the outcome of European banks’ stress tests.

 
Cours du petrole

Higher oil prices: good news or bad?

On 20 January, Brent crude oil was trading at USD27.88 a barrel (EUR25.52), the lowest price this year. Prices recently rebounded to USD50 (EUR44.70). Without trying to forecast future oil pricing trends – which, as shown by the experience of 2015, are even more difficult to predict than other economic variables – it is worthwhile to consider the consequences of higher prices

 
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Monetary boomerang

In most countries, central bank independence from government is taken for granted. Yet, the autonomy, i.e. the ability to do whatever a central bank considers necessary within its mandate, is sometimes surprisingly limited, albeit for other reasons.

 
Eurozone

Eurozone: a real recovery

Surprisingly strong Q1 shows the Eurozone recovery is for real but inflation remains a key policy challenge.

 
2016 03 04

The game of correlations

One of the more surprising developments since the start of the year has been the rise in the price of gold.

 
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Meetings at the summit

In the Eurozone, China and the UK, purchasing manager indexes for the manufacturing sector declined in February. In the United States, in contrast, the manufacturing ISM rose but still held below 50, the level separating industrial expansion from contraction.

 
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Currency markets weigh on central bank autonomy

This chart shows the evolution of the euro, the yen and the US dollar since the start of the year as well as the evolution of 10 year government bond yields in Germany, Japan and the US.