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October 13, 2017
On the eve of third quarter publications, the good health of the US and European economies carries the markets.

US employment figures improved further and the economic climate continued to brighten in Europe, with industrial production data coming in at +3.8% vs an expected +2.6%.

The Catalonian referendum did not drive markets lower, although the crisis has not yet been resolved, while the deadlock in the Brexit negotiations demonstrates the difficulty...

6 October 2017
The economy flies over the political turbulence.

Certain European leaders and decision-makers with inflated egos appear to be more interested in securing power than democratically respecting the law and the rules of economic pragmatism.

Playing the dramatic “oppressed” nation card which is currently blessed by good fortune (3.5% quarterly Spanish GDP growth), the incumbent Catalonian leaders have voluntarily backed themselves into a corner in their headlong rush to embrace insularity in a globalised and digitalised world. Catalonia represents 2% of the eurozone economy, with public debt representing...

29 September 2017
Europe "En marche" ?

As expected, the Alstom-Siemens Mobility deal has been announced. What struck us most during the press conference was the resolutely pro-European speech from the Siemens CEO Joe Kaeser. Although we are understandably cautious about the merger, given the numerous failed attempts to forge industrial alliances with incumbent French companies such as Alcatel-Lucent and Areva-Siemens, the creation of a European rail leader, in an attempt to replicate the Airbus model, would appear inevitable in view of the heightened competition from China.
Meanwhile, the...

25 September 2017
The Eurozone strikes back

Following the election victories of Emmanuel Macron and Angela Merkel, Europe is slowly but methodically erasing the scars left behind by the deepest economic, social and institutional crisis in its history. As the birthplace of democracy, Europe has so far refused to yield to the siren calls from extreme populist and nationalist political movements. Despite criticism from the mainstream financial press focusing on highlighting the sins committed by a kaleidoscope Europe, rather than discerning the rise in domestic extremist movements, the euro zone...

15 September 2017
The acceleration of economic growth in Europe and the inflation in the US advocate for a change in monetary policy

The pace of economic growth in the eurozone is accelerating. A number of enlightened forecasters predicted a GDP increase of over 2% in 2017. Although this symbolic threshold may even by surpassed this year, it remains to be seen whether the eurozone will accelerate further in 2018. For the time being, nothing is indicating the contrary. In the US, inflation picked up again during August, to an annualised rate of 1.9%, driven by a possible sharp rise in commodities prices. Strong economic momentum, both in the eurozone and the US, would imply a...

8 September 2017
ECB maintains status quo pending the October meeting.

Harvey, Irma, successive cyclones unfortunately wreak the same havoc on the landscape.

Their economic impact, particularly in the US where Florida is expected to be hit again, will not be negligible however and a wide range of industries will be affected, although the dynamic US and global momentum is not expected to be hampered. Global synchronised expansion across the board is a rare enough event to merit highlighting. As expected, the ECB did not modify its asset purchase programme. It is expected to do so at its October meeting and finally succeed...

1 September 2017
Tensions on the Korean peninsula, historic flooding in Texas, strong Euro… major events broke a stretch of and could set the tone on financial markets for the next weeks.

The launch of a missile by North Korea over Japan has rekindled the diplomatic crisis between the US and the rogue nation. The Americans are also facing Hurricane Harvey which is devastating Texas and adding to the reigning anxiety. It will take some time for the state’s oil infrastructures to resume production. Although the impact on the US has yet to be fully assessed, the economy is nonetheless continuing to expand, despite the absence of any decision regarding tax reforms for the time being. After constant one-way investment flow since April...

25 August 2017
Berlusconi is back. Status quo after Jackson Hole Symposium.

The markets, caught in snooze mode during the sunny return from the summer recess, were rudely awoken by the potential resurgence of the Italian political mogul Silvio Berlusconi ahead of the legislative elections in April 2018. Potential allegiances centred around Forza Italia, the party led by the man who has played a key role in the Italian political scene since 1994, with either the PD or an alliance between the Lega Nord and Fratelli d'Italia have so far failed to secure an absolute majority. The protagonists nonetheless perceive these...

18 August 2017
A week marked by the Barcelona terror attacks

There was no major economic or financial newsflow last week. Markets were erratic and generally less bullish than before the summer. The tragic terrorist attacks in Barcelona served as a reminder that Europe is still under threat, whilst simultaneously attempting to absorb or stem migratory pressure. Terrorism failed to curb the economic dynamism in Europe however. Unemployment in France fell for the eighth consecutive quarter and now stands at 9.2%. The 8.5% threshold could be breached next year. The uptick in the employment rate, albeit belated,...