En Marche – Euro Zone is gathering momentum – First Part

Promising Factors vs Risks

According our opinion, here-with some good reasons for being optimistic: 

  • Global Growth Acceleration: as the IMF indicated when it recently upgraded its World Economic Outlook, growth and equity markets accelerated since summer 2016 and endured both Brexit and Trump’s election.
  • Economic Climate Indicators: Data from the European Commission’s overall business climate index, which points to the phase of the business cycle, rose to 1.34 in September from 1.08 in August — its highest reading since April 2011 when it was at 1.35.
  • The balance of political risks shifted from some countries to others, including GB, the US and China.
  • Little change in monetary policies 

On the other hand, we foresee these risks:

  • There is concern by most analysts about the re-emergence of oversupply, a renewed rise in crude stocks, and how OPEC and its allies will exit from their current production deal in 2018.
  • Acceleration in the normalisation of US monetary policy
  • The IMF, echoed by exiting German minister Wolfgang Schäuble, warned about the debt bubble risking to explode and creating a new global crisis like the one in 2007. China is especially vulnerable to this.
  • Donald Trump …


HH cons: Household consumption / Gov. Exp: Government Expenditure / GFCF: Gross Fixed Capital Formation / Net XM: Net exports
Source: ODDO BHF AM SAS. Figures as of 28 August 2017.


– US growth is currently above its potential
– The United States has seen positive growth since 2010
– Household savings have declined over the past two years. Strength of growth will depend on households’ consumption-to-savings ratio
– Trumponomics is not dead against the background of hurricane impact



Source: ODDO BHF AM SAS, Thomson Reuters, Datastream, Bloomberg. Figures as of 28 August 2017.


– In light of growth and a low unemployment rate, the Fed should be normalising its monetary policy
– And yet, it is still holding back, as inflationary pressures are not yet serious enough and are hard to interpret




Nicolas Chaput
Global CEO & Co-CIO

Laurent Denize
Global Co-CIO

Gunther Westen
Deputy Head of Asset Allocation



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