Volatility: back to normal

Michala Marcussen, Group Chief Economist, explains the latest economic trends.

Economic and financial analysis by Michala Marcussen, Group Chief Economist.

Cooling effects of global warming

Climate change was long considered a slow-moving structural shift, with the bulk of the impact falling well beyond the horizon of most economic forecasts, but this is changing fast and decisions made at the upcoming COP25 in Madrid will matter for the near-term.

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Dollar coin

Dollar strength may be challenged by fiscal policy

05/09/2019
President Trump is pressuring the Federal Reserve to ease aggressively and has complained that China and Europe are taking unfair currency advantage. And, in early August, Washington designated China a currency manipulator. The ever lower and flatter American yield curve, however, signals concern that monetary easing will struggle to revive the economy. Further evidence hereof resides in the coinciding strength of the US dollar and Gold.

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Man on a japanese trading floor

What if the Japan is the good scenario?

30/05/2019
The impressive expansion, that saw Japan become one of world’s richest nations, came to an abrupt end almost three decades ago with bursting of the bubble. Subsequent domestic policy errors combined with negative external shocks, and not least the 1997 Asia Crisis, sent the Japanese economy into the icy grip of deflation. Exiting this state was not made any easier by a rapidly ageing population and the 2007/08 Great Financial Crisis.

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Theresa May in front of UK and European flags

The clock is ticking for Europe

22/03/2019
Last week saw a second landslide rejection of the Prime Minister Theresa May’s Brexit deal, and at the time of writing, uncertainty remains high. May’s strategy of essentially running down the clock in a bid to secure her deal has again failed at a high cost to the British economy, and to the rest of Europe.

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Portrait of Michala Marcussen

The fear of “no game in town”

10/01/2019
Will 2019 see the start of a recession? Consensus says no, but the financial market slump in December shows that investors are now demanding higher risk premia. To our minds, this is not so much a reflection of changing real economic fundamentals but rather a deeper-rooted concern that we are shifting from the situation where central banks were “the only game in town” to one with “no game in town”.

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The paradox of uncertainty

05/07/2018
A certain level of uncertainty is part of life, and insurance (both private and public) and precautionary savings help manage this so that we can go about our lives unabated. At times, however, uncertainty increases well beyond these levels, often driven by political events. Faced with such uncertainty shocks, business managers will often freeze new investment and hiring decisions, while consumers delay spending on big ticket items such as cars or the purchase of a new home.

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Bitcoins, cash and tulips

05/07/2018
Bitcoins generated much excitement in 2017, starting off the year valued at just over $1 000 per bitcoin and closing the year at around $10 000, having peaked at close to $19 000 in mid-December 2017. While the extreme volatility of Bitcoin generates both spectacular gains and devastating losses, it significantly reduces the ability of the crypto-currency to serve as a means of payment; the purpose for which it was originally designed. Michala Marcussen, Group Chief Economist, explains the latest trends around the bitcoin.

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US tax reform: Europe must be vigilant

11/12/2017
The text of the US tax reform bill passed by the Senate during the night of December 1 now has to be reconciled with the version passed by the House of Representatives on November 16, before the final bill is presented for vote by both Houses, and signed by the White House. The Republicans are hoping to finalize this process before Christmas.

Read the article about the US tax strategy by Michala Marcussen

What is the economic environment as Macron’s term begins?

Whereas the two previous five-year presidential terms had been marked by major slumps – a global recession in 2008 and 2009 and the euro zone crisis in 2011 and 2013 – the new French president will benefit from a far healthier economy as his term begins.

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