Federal Reserve: Tylenol® monetary policy

 

The Federal Reserve decided to cut interest rates by half a percentage point in an emergency move designed to bolster the U.S. economy amid risks posed by the Covid-19 outbreak.

 

U.S.: Housing to remain strong

 

Solid fundamentals will continue to drive housing in 2020.  The housing market, which had been lagging through the first half of 2019, has enjoyed a recent rebound. 

 

In or out? Measuring the Euro break-up risk

The “Allianz Euro Fragility Index” captures the systemic tail risk of a Eurozone breakup.

Agrifood: New risks looming ahead

Major insolvencies are on the rise in the global agrifood industry. At first glance, the global agrifood industry appears to be performing well, helped by the growing global population, especially in Asia.

Turkey: Risk of a sharp exchange rate correction in 2020

As expected, the Monetary Policy Committee (MPC) of Turkey disregarded rising inflation and once again cut its key policy one-week repo rate today, by 50bp to 10.75%. 

Is Germany a “stranded” economy?

After four consecutive years of strong economic growth above the potential rate, the high-flying German economy experienced a sharp deceleration in momentum in 2018. The combination of some key characteristics of Europe’s largest economy proved highly unfavorable in an environment of slowing global momentum and elevated political uncertainty.

Global insolvencies: Record high failures of major companies

On top of the upward trend in business insolvencies , we identify a record level of failures of large companies - those with over EUR50mn of turnover- with 342 major insolvencies totaling more than EUR205bn in turnover in 2019. 

Don’t judge the inflation book by its cover

Market-based long-term inflation expectations tend to concur. They are meaningful because capital markets participants are incentivized to price them as accurately as possible: more directly than other agents, they have skin in the game.

Coronavirus outbreak: USD26bn weekly in trade spillovers

Following our estimate of the economic impact on China, we look into the impact on the rest of the world: manufacturing and trade recessions are likely to continue, with a trade shock of USD26bn per week from the lockdowns in China (which should end on 9 February at the earliest), and global growth barely staying afloat at +2% in Q1 2020.