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Apr 29, 2021

European households: The double dividend of excess savings

In 2021, the glut of excess savings could generate a double dividend for the Eurozone: first, a consumption boom of EUR170bn, or 1.5% of GDP. In 2020, gross savings in the Eurozone increased by more than +50%, and “excess savings”  stood at more than EUR450bn, or over 4% of GDP, thanks to reduced spending on services amid renewed lockdowns.

Apr 26, 2021

Equity markets: In search of Goldilocks' inflation


What effect do changes in inflation have on equity performance? What do we expect moving forward? Historically, monetary and fiscal easing periods tend to be favorable for equity investors, as equity tends to generate decent returns in periods of accelerating, but still manageable, reflationary pressures.

Apr 22, 2021

Investment is back: Harder, better, faster, stronger?

In the short run, a demand catch-up and the reduction in spare capacities will drive a business investment recovery… With the progressive easing of sanitary restrictions, normalizing capacity utilization levels will push up business investment by +18.4% in the UK, +5.4% in France, +4.0% in the US and +2.5% in Germany.

Apr 19, 2021

European Corporates: Cash-rich sectors get richer

The Covid-19 crisis has pushed up cash concentration among European non-financial corporates: overall, NFCs now hold cash reserves equivalent to three months of turnover, more than half a month higher than pre-crisis averages, and it is the richest sectors and companies that have become even richer. 

Apr 15, 2021

Demystifying the four horsemen of the inflation apocalypse

Will Covid-19 be the inflation game-changer in 2021? We are firmly in the “reflation” not “inflation” camp: expect a temporary inflation overshoot in the coming months, rather than consumer prices galloping out of control. 

Apr 12, 2021

Taper Tantrum in 2021-22: Beware of the TUCKANS

The Fed will start to normalize its monetary rather sooner than later. With the recent USD1.9trn fiscal stimulus package and a new USD2.3trn infrastructure program (our estimate of what could represent the amount of the Build Back Better program), US GDP growth is likely to reach +6.1% in 2021 and +4.1% in 2022. 

Apr 07, 2021

Unleashing excess FX reserves: To boost growth in Latin America

In 2021, Latin American countries could be holding "excess" FX reserves of around 8.8% of GDP, with an opportunity cost to economic activity as high as 0.7% of GDP. Redirecting excess reserves to long-term productive investments would help Latin America bridge its infrastructure gap, boost productivity and thus enhance the business environment, creating more opportunities for companies.

Apr 06, 2021

Biden´s infrastructure plan: Defying gravity?

Biden’s USD2.3trn ‘Build Back Better’ infrastructure plan represents the second stage of a three-phase stimulus rocket and will be a long-term driver of growth in the US.

Apr 01, 2021

Race to the post Covid-19 recovery: Seven obstacles to overcome

The global recovery is on the right track albeit conditional on key differentiating elements across countries. Global GDP is expected to rebound by +5.1% in 2021, with one fourth of the recovery being driven by the US, while China should contribute less to growth by progressively adopting a less accommodative economic policy. In 2022, world GDP growth should reach +4.0%. Europe should recover its Covid-19 losses only at this horizon against H2 2021 for the US. The race to recovery will hinge on seven key obstacles.

Mar 26, 2021

The Suez canal ship is not the only thing clogging global trade

On 23 March 2021, a 400-metre-long container ship ran aground in the Suez Canal in Egypt. We calculate that each day of immobilization could cost global trade USD6bn-10bn. The problem is that the Suez Canal blockage is the straw that breaks global trade’s back. Supply-chain disruptions since the beginning of the year (shortages of containers, semi-conductors, etc.) could cost real trade growth -1.4pp or roughly USD230bn of direct impact, on top of the immobilization in the Suez Canal.

605 releases in total