Monday 3 March 2014 


The developments in Ukraine and in particular Crimea are affecting financial markets along the usual lines: equities are down with Europe underperforming, the euro has weakened against the US dollar, the Swiss franc is a bit stronger, gold and oil are up slightly and bond yields have eased on safe-haven buying. In future, this day will be referred to as a textbook case of how markets reflect mounting geopolitical concerns. Nevertheless, the extent of the reaction seems rather subdued, with the exception of the EURO STOXX index, which saw an accelerated decline towards the end of the trading session.

Tuesday 4 March 2014 


Markets have started to stabilise after yesterday’s correction. Political risk seems to be priced in for the time being, but this can change every hour.

Wednesday 5 March 2014


I record my latest monthly video. It is devoted to European equities and why they are expected to outperform the US market: more attractive valuations, faster expected earnings growth, lower profit margins hence more upside potential, a broader international diversification of revenues and a favourable monetary policy divergence (a gradually tighter policy in the US with the possibility of a market-friendly surprise from the ECB).

Thursday 6 March 2014


I follow Mario Draghi’s news conference after the ECB meeting live via the internet. Though I didn’t expect fireworks in terms of a policy decision given the improvement in eurozone cyclical indicators, it is not so much the decision not to change anything which is disappointing, but rather his statements during the Q&A. Admittedly, the consensus in the ECB’s governing council is to maintain the forward guidance and its embedded bias (keep rates at the current level and lower them if need be) even when economic data continues to improve. But Draghi explains this means that the ECB will accept the reduction in real interest rates which will result from an uptick in inflation as the economy recovers. Not exactly an aggressive stance. In the meantime, the 2016 ECB inflation forecast is now below that of the Survey of Professional Forecasters (1.5% versus 1.7%), so clearly, the professional forecasters are either more bullish on the economy or they expect the ECB to act at some point. I think the latter interpretation is the right one.

Friday 7 March 2014


In my monthly call with our Indonesian equities CIO based in Jakarta, he explains why the market has seen such a strong performance in recent weeks. A key factor has been improved macroeconomic data (trade balance moving into a monthly surplus since October, falling inflation) which has brought back international investors. Whereas Indian equities acted like a magnet for foreign investors in Q4 2013, it seems that Indonesia has now taken over this role. 


William De Vijlder

Vice – Chairman of BNP Paribas Investment Partners