那提西银行-全球-宏观经济-不确定性和股票波动的回归-20180328-7页_687kb

Flash Economics Summary

Core Content

The document discusses the return of uncertainty and equity market volatility in the context of global economic conditions, particularly focusing on the United States and the euro zone. It highlights that this increase in market volatility is not unexpected and is driven by multiple factors affecting growth, inflation, monetary policy, and economic policy.

Main Views

• Equity Market Volatility: Since early 2018, equity markets have experienced a rise in volatility, both actual and implied (VIX), indicating a heightened risk perception.
• Legitimacy of Volatility: The increase in volatility is seen as a legitimate response to the actual rise in uncertainty, rather than a mere market fluctuation.
• Uncertainty Factors: The document outlines four main sources of uncertainty that are contributing to this market reaction.

Key Information

1. Uncertainty About Growth

• The unemployment rate is returning to the structural unemployment rate, which raises questions about future growth potential.
• In the U.S., real GDP growth is expected to return to a lower level of potential growth.
• In the Euro zone, while unemployment remains high, recruitment difficulties are increasing, which could signal a return to growth but also potential slowdowns due to reduced investment.

2. Uncertainty About Inflation

• There is concern about whether core inflation and unit labor cost growth can remain low even as unemployment declines.
• This uncertainty challenges the traditional Phillips Curve relationship between unemployment and inflation.

3. Uncertainty About Monetary Policies

• Central banks are facing challenges in determining their policy responses when the economy reaches full employment without inflation.
• The Federal Reserve appears to be moving towards normalizing monetary policy, while the ECB is waiting for inflation to approach its target before raising interest rates.

4. Uncertainty About Economic Policies

• In the U.S., the adoption of expansionary fiscal policy at full employment may lead to a faster-than-expected rise in interest rates.
• Protectionist policies are also under consideration, which could potentially increase inflationary pressures.

Conclusion

• The increased equity market volatility is not considered shocking and is expected to persist due to the underlying uncertainty in key economic areas.
• This uncertainty is primarily driven by the interplay of growth, inflation, monetary policy, and fiscal policy, especially in the U.S.

Disclaimer

• The document is intended for professional and qualified investors only.
• It is confidential and not to be disclosed to third parties without prior consent.
• It does not constitute a personalized investment recommendation and is based on public information.
• No liability is accepted for the accuracy, completeness, or relevance of the information provided.
• The views expressed are those of the authors and may differ from those of Natixis or its affiliates.

Regulatory Information

• Natixis is supervised by the European Central Bank (ECB) and regulated in various jurisdictions including France, the UK, Germany, Spain, and Italy.
• The document is subject to specific regulatory frameworks and is not approved, licensed, or registered by any regulatory body in the GCC or Lebanon.