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Brexit: Trade tricks won´t be enough

The UK intends to lower its global import tariff by -2.2pp to 2.8% post its EU exit, the second lowest tariff among G-20 countries after Australia. These new tariffs will apply to imported goods from countries with which the UK will not have a Free Trade Agreement (FTA) on 01 January 2021.


Chinese banks put to the test of RMB8tn of Covid19 problematic loans

In China, financial and monetary conditions are clearly easing, as measured by our credit impulse index: as of May 2020, it stood at 6.0pp, up from 1.9pp at the end of 2019. However, the PBOC’s stance appears to be much more prudent compared to other major economies.

Allianz Global Insurance Report 2020: Skyfall

The global insurance industry entered 2020 in good shape: In 2019, premiums increased by 4.4%, the strongest growth in four years. 2020 will be different: Premium income is expected to shrink by 4.7% in Western Europe and by 3.8% globally – compared with the pre-Covid-19 trend, around EUR 360bn in premiums will have gone missing

Money is power: Can a country’s culture increase the risk of payment defaults?

The Covid-19 crisis is morphing into a payment crisis as companies tend to protect their working capital by paying their suppliers late. Defaults and insolvencies loom ahead. Companies need to understand structural payment patterns to help them triage bad payers from the good ones in finding their way back to growth.

When Main Street makes it to Wall Street

The US equity market rally since 23 March has surprised and wrong-footed more than one professional investor. We see four valid explanations for the current decoupling between the U.S. equity market and economic fundamentals.

Construction companies in Europe – Size does matter

Covid-19 is sparking a profitability shock for SMEs in the construction sector. SMEs represent the lion’s share of companies in the construction sector, with about 80% of the sector’s turnover in Europe.

The risk of 9 million zombie jobs in Europe

In Europe, blanket job-retention schemes helped prevent mass unemployment in the short-term, contrary to the U.S. experience: Close to a third of Europe’s workforce or 45 million jobs in the five largest economies alone are currently benefiting from national employment support schemes. 

Equity markets: Have policymakers created Pavlovian markets?

Wall Street is responding faster and faster to counter-cyclical policies, as if it was 100% sure that past experience is a sure guide to the future. In the context of the Covid-19 crisis, the response time of the U.S. and global equity markets to the beginning of the implementation of counter-cyclical monetary and fiscal policies has indeed shrunk to zero.

Rough landing: 2020 will be a terrible year for air transportation

Global demand in air transport will not return to its pre-Covid-19 level before 2023. The unprecedented slump in international travel will make 2020 a terrible year for the air transportation industry.

Social Risk Index: Structural determinants of social risk

As the Covid-19 pandemic pushes the global economy into the worst recession since WWII, systemic social risk could become a more important factor of political risk and worsen the business climate in some countries.