Read our market review and find out all about our theme of the week in MyStratWeekly with our experts Stéphane Déo, Axel Botte, Aline Goupil-Raguénès and Zouhoure Bousbih.
This week :
Topic of the week: Inflation, global phenomenon
- Many commentaries explain that inflation dynamics are different from country to country. This view does not really stand up to analysis: a very large part of inflation is common to all OECD countries;
- For the investor, it is both necessary to have a global approach; more than a dozen countries have inflation-linked bonds. Country differences are sufficient to provide significant diversification opportunities;
- On the other hand, equities become particularly vulnerable to higher rates. And so the stock-rate diversification that we have experienced over the past two decades is probably dead.
Market review: Equities dip ahead of Fed meeting
- Fed: 50 bp hike and QT announcement this week;
- Higher yields lead to repricing of risk premia;
- US equities under pressure amid fund outflows;
- King dollar reigns as the only safe haven.
Chart of the week
Rising energy prices are an important component of inflation growth in the euro area. It is also a negative contribution to household disposable income.
Using Eurostat figures, it can be seen that the change in energy prices has reduced household disposable income by about 4% over the last 12 months.
This is therefore a significant recessionary effect that should weigh on the trajectory of household consumption in the coming months.
Figure of the week
The spread between 30-year inflation swap rates in the US and in the euro area. The premium on 30-year US inflation average 45 pb since 2010.
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