Two friends sit on a beach somewhere on the French Atlantic coast… With this fictitious story the reader is invited to spot the metaphors often used in economic and market comments.
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‘Does Europe Risk Economic Spillover From Markets?’ on Bloomberg.com
Watch the interview on Bloomberg.com
« Beurzen willen positieve kant van lage olie-prijs niet zien »
« Beurzen willen positieve kant van lage olie-prijs niet zien »
What explains the negative correlation between equity markets and the euro?
The strong decline of equity markets in China has caused a decline of the Euro Stoxx index but also a strengthening of the euro against the US dollar. Whereas the long term relationship between European equities and the euro is positive, this year the correlation has turned negative. This can be explained by the use of the euro as a funding currency for carry trades. If risk rises as witnessed by a decline of equity markets, risk appetite goes down and speculative currency positions are scaled back. This causes the euro to rise.
Does the euro influence export expectations?
The recently released IFO survey of German export expectations has shown a continuing downward trend which started in the spring of this year. Since mid-March, the euro has strengthened against the US dollar, admittedly with a great deal of volatility. Based on economic theory, it is tempting to see a causal relationship between the two developments: a stronger (weaker) currency would weigh on (boost) exports, something which would be reflected in the assessment by companies of their export opportunities.
Market volatility made in China: uncertainty dominates the direct economic impact
The bursting of the Chinese equity bubble and the surprise devaluation of the yuan have shaken investor confidence across the globe. More than the direct economic impact, it is the jump in uncertainty which is reflected in the decline of global equity markets. On the back of interest rate cuts and a lowering of the reserve requirements of banks, more policy measures are to be expected in China although some additional weakening of the currency cannot be excluded.
Currency wars, again
The exchange rate remains a key instrument to influence the growth and inflation outlook.
Increasing divergences: causes and consequences ?
The economic environment is characterised by divergences. The divergence in terms of expectations for monetary policy (Fed vs ECB) has a big impact on bond yields and the EUR/USD exchange rate. The Eurozone also sees divergences, between countries but also between sentiment and activity indicators.
The world is curved: 18 reasons why a small change can have a big impact
Investors in the US bond market are of the view that the transition to a tighter monetary policy will be extremely smooth but in reality, small changes can have a big impact, depending on the environment we’re in. This article lists 18 reasons why the economy and markets behave in a highly non-linear way.
How best to address the quandary faced by investors?
Text published in Le Jeudi (Luxembourg) on 1 July 2014. In developed economies, the investor has to contend with a triangle that is difficult to manage. At the base of this triangle are interest rates, which are set to remain particularly low for quite some time, and risk indicators which have turned green. Indeed the […]
Should Fed communication become more ambiguous?
Article published on LinkedIn on 20 June 2014 I’m touring in Asia for ten days meeting clients in Singapore, Jakarta, Hong Kong and Shanghai. Amongst the frequently asked questions, two dominate: how concerned should we be about the slowdown in China (a question very much related to the property market) and what can we expect […]
Finance and investing : A peaceful uneasy feeling
Article published on LinkedIn on 16 June 2014 Comforting economic news and low levels of the ‘fear gauges’ in markets reflect a peaceful environment, yet investors feel unease. This is healthy and should prolong the bull market. Peaceful The cyclical environment looks peaceful. The US should continue to grow at a satisfactory pace, European business […]
The awakening of emerging markets
Article published in Les Echos (France) on 7 April 2014 The solid recent performance of the emerging equity index is due to factors that are inherent to each country and not to a common factor. India is seeing growing interest from foreign investors, thanks to a credible monetary policy, a reduction in its external deficit, […]
The Fed makes waves on emerging markets
This is an updated version of the article published in Le Jeudi (Luxembourg) on 6 February 2014 and in Beleggers Belangen (Netherlands) on 11 February 2014. A sturdy ship is needed when sailing in choppy waters. This is the conclusion we can draw from the turmoil that hit several emerging markets earlier this year. There […]
Four ways to manage uncertainty
Article published in Le Jeudi (Luxembourg) on 6 March 2014 Ninety years ago, an US economist, Frank Knight, first drew the distinction between risk and uncertainty. Risk is a statistical concept. It can be calculated on the basis of historical performances. Uncertainty is another matter entirely. Uncertainty is our awareness that things can happen, combined […]
Disinflation creates more losers than winners
Article published in Les Echos l’Avis (France) on 25 February 2014 The main news on the financial markets is that inflation is trending downward in the euro zone. This is regarded as a major challenge for the European Central Bank, which, if mismanaged, could plunge our countries into Japanese-style deflation. Mario Draghi and his colleagues […]
‘Web-in live’ over het Europese herstel: een dertig minuten durend Live event over de redenen waarom Europese aandelen het wellicht goed zullen doen.
Veel factoren stuwden het cyclische herstel van de Europese markten Zal die beweging standhouden? Hoe leidt dit een outperformance van Europese aandelen in? Moeten beleggers naar een overweging in Europese aandelen overstappen? Beantwoorden de bedrijfswinsten inderdaad aan de verwachtingen? … Nog vragen? Meld u nu aan!
How does disinflation impact the market outlook?
How does inflation impact the market outlook? – William De Vijlder William De Vijlder Vice-Chairman, BNPP IP William De Vijlder, Vice – Chairman van BNP Paribas Investment Partners