Read our market review and find out all about our theme of the week in MyStratWeekly and its podcast with our experts Stéphane Déo, Axel Botte, Aline Goupil-Raguénès and Zouhoure Bousbih.
Summary
Topic of the week: Clash of Empires: new regime for Asset Allocation
- The peak of globalization could be reached, calling into question the disinflationary trend of the last thirty years;
- Diversification no longer works under high inflation;
- Conventional approaches to multi-asset class management can expect a return to historic norms;
- However, such expectations are difficult to maintain when volatilities, correlations and the very notion of “risk-free” assets evolve to adapt to structural changes;
- Investors must adapt to changing correlations in a changing world.
BREAK: this is the last MyStrat of the year, we are on break until the beginning of next year. All the team wishes you a great holiday season.
Market review: ECB QT awaited by markets
- ECB will unveil its QT plan;
- TLTRO: 447 billion to be paid back to ECB;
- Breakeven inflation rates fall on oil price slump;
- Credit spreads resist to equity market weakness.
Stéphane Déo's podcast
- Recession or no recession on Q4?
- Is the collapse of French productivity worrying?
Chart of the week
The European economy is showing good resilience to the energy crisis for now. The projected recession is still not there, Q3 growth was 0.3% and the most recent figures are ambiguous on Q4, suggesting growth very close to zero. The energy crisis is obviously a problem for growth but the crisis is much less serious than feared.
One of the reasons is in the graph above, alternative sources have been developed, in particular the imports of liquefied gas which have greatly increased and allowed (in part only!) to level off the decline of Russia’s importations.
Figure of the week
On the first of January, Croatia will join the Eurozone and adopt the common currency. It will be the 20th country to join the Euro.
