H goulletquer

A world searching for meaning and markets looking for return HervĂŠ Goulletquer 23 March 2015 Direction de la Gestion

Three glances… … and a couple of questions!

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Which sight is the most appropriate?

From business surveys to Nowcasts

Source: Bloomberg, Atlanta Fed

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The “great recession� was not a cyclically driven crisis Does it tell something about the shape of the recovery?

According to calculations made by Bruegel Institute, the answer seems to be more yes than no In that case a limited ability to extrapolate rapid growth for long in countries as Spain or Ireland

Source: Bruegel Institute LA BANQUE POSTALE ASSET MANAGEMENT

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Wage cost: a lack of sensitivity to unemployment rate’s developments; for how long?

Will inflation come back one day closer to the Fed’ target?

Source: Bloomberg LA BANQUE POSTALE ASSET MANAGEMENT

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Long term, market inflation expectations seem mostly impacted by the level of economic growth Perhaps even more than in the US, the ability for the HICP coming back to the official 2% target is debatable

Source: Bloomberg LA BANQUE POSTALE ASSET MANAGEMENT

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An always lower real FF rate: Have we reached the inflexion point?

No consensus between markets and the Fed about the way forward

Source: Bloomberg LA BANQUE POSTALE ASSET MANAGEMENT

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From balance sheet’s developments … … to market’s expectations Investors cannot remain indifferent: less influence of US markets on their European counterparts?

Source: Bloomberg LA BANQUE POSTALE ASSET MANAGEMENT

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No longer a close relation between the nominal GDP growth and the level of LT rates Possible explanations: still deleveraging, preference for savings, central bank’s behaviour and financial repression Low rates for long?

Source: Bloomberg LA BANQUE POSTALE ASSET MANAGEMENT

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To tell a long story short… … more value to extract from equity markets rather than from bond markets

Source: Bloomberg LA BANQUE POSTALE ASSET MANAGEMENT

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