The idea that we are entering a phase of financial repression regularly returns to the fore as real interest rates are negative and nominal interest rates are very low.

Reforming the European fiscal framework would improve the resilience of the Eurozone...provided that fiscal discipline is not abandoned.

As the European economy is recovering from the largest economic shock of modern history, we are revising our growth and inflation assumptions to the upside.

Despite the Covid economic shock, house prices have continued to rise in most advanced economies, and are also increasing rapidly in some emerging economies. This is not (yet) a global housing boom. Indeed, indicators of overvaluation remain below those observed before the Great Financial Crisis (GFC) and are still very contrasted across regions.

The Covid-19 crisis is exceptional in many ways. It is the most serious health crisis since the Spanish flu a century ago. This crisis resulted in an unprecedented contraction of activity in 2020 and in the deepest global recession since World War II. However, this recession has been the shortest and was not accompanied by a financial crisis thanks to fiscal and monetary policy responses, which have cushioned the economic shock. The exceptional measures put in place aim to buy the time needed to emerge from the health crisis.

Profound changes in the international arena are underway. Together the EU, China and the United States are the three largest economies in the world. Whereas, previously, economic and geopolitical issues were treated separately, it is increasingly clear that the United States and China are using their economic power for geopolitical purposes. Such geopolitical leadership has economic implications.

The recent dovishness from the Fed, a benign inflation environment and the easing in global financial conditions continue to support a goldilocks environment for Emerging Markets (EM) assets.

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The robust performance of the US economy in 2018 has led to the supremacy of US risk assets compared to the rest of the world.

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