Market Compass October 2022

In Short

A team of analysts based in Paris, Cologne, Trieste, Milan and Prague runs qualitative and quantitative analysis on macroeconomic and financial issues. The team translates macro and quant views into investment ideas that feed into the investment process.

Highlights:

  • The fast-track monetary tightening and the EU energy crisis are powerful headwinds for the global economy: recession forces are set to grow over the turn of the year.
  • The depth of the EA recession will partly depend on winter temperatures. Europe’s large negative terms of trade shock are already damaging its competitive position and may persist for years.
  • The worst scenarios are getting more likely. The Fed’s pivot and eventual opening of the diplomatic route in Ukraine are great bullish triggers, but unlikely in the near term.
  • We are still focused on the downside for now, as risk assets fail to price enough bad news. We see cracks in the global financial plumbing, in part due to a shortage of low-risk assets and extreme policy uncertainty.

 

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Market Compass October 2022

The latest views, research and investment insights from our experts

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