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
La revue des marchés : budgetary short-sightedness?
- Projected budget deficits this year remain large. Budgets should contribute to growth and absorb the energy shock;
- In the medium term, this puts public finances on a worrying trajectory and, above all, limits the room for maneuver should another crisis affect the European economy;
- So far so good, but once again, focus on immediate interest. Yet another example of “budgetary short-sightedness”?
Market review: Immaculate rally
- Disinflation keeps everything rally going;
- US inflations down to 6.5;
- Renewed downward pressure on bond yields;
- Risky assets still upbeat amid lower dollar.
Le podcast de Stéphane Déo
- What about the reopening of China?
- Isn’t equity rally too much?
Chart of the week
China is reopening and one high-frequency gauge for increasing activity and return to normalcy is the metro passenger volume. The chart shows the two main cities, Beijing and Shanghai. Overall, transport volume were about 1/4 of normal in China at the end of last year. They are now rapidly up and back to about 3/4 depending on the cities.
This illustrates the rapid reopening of the Chinese economy. A major element for the global growth trajectory. Hence also for inflation.
Figure of the week
2022 was the 5th warmest year on record. Temperatures were almost 1.2 degrees above pre-industrial levels.
