Structured Products
Central Banks believe being now out of ammunition
OUR MACROECONOMIC ANALYSIS
The three largest developed economy Central Banks met again in April. The Bank of Japan took the markets by surprise in ultimately declining to take new easing measures. This could very well be a sign that Central Banks believe they are now out of ammunition. Governments must now seriously pick up the pace of structural reforms to make long-term growth last. It happens that growth generally fell short of expectations in the first quarter, except in Europe and China. The current slowdown includes a strong structural component (i.e., demographic changes and a marked slowdown in productivity gains). The consensus nonetheless forecasts a macroeconomic upturn in the second half, which will be welcome in the current environment. This rebound has already been abundantly priced in to commodities.