Marc-Antoine COLLARD, Chief Economist, Head of Economic Research, Asset Management, Europe
Following the debacle seen in Q4 2018, the financial markets continue their ascent. Current investors optimism is not based on macroeconomic data, seeing as the global expansion continues to lose momentum, primarily in the manufacturing and industrial sphere. The Markit manufacturing business confidence index remains in a downtrend, with many countries – Germany, Spain, Italy, Japan, China, Taiwan, South Korea – now below the 50 threshold, in contraction territory. Rather, three pillars have been underpinning the bullish view: the hope surrounding the appeasement of geopolitical risks, the effectiveness as well as the magnitude of the measures put in place by the Chinese authorities and the Great Retreat by central banks, namely the Fed. However, investors will have to determine whether financial markets have yet fully discounted the extent of the weak data or whether the data will recover and align with the signal from markets. Read more....
