- In the US, the normalisation of the monetary policy has been put on hold for the time being pending the release of stronger data.
- The rebound in oil prices has brought relief for the highly-leveraged shale oil sector
- The stabilisation of the dollar, better Chinese data and a strong Q1 in the Eurozone reduce the pressure on the manufacturing sector
- However, pressure on corporate profits do not bode well for business investment
- The US consumer remains key, hence the importance of the labour market and wage evolution. In the Euro area, the recovery is going on although we expect some moderation in 2017 due to the impact of rising inflation on consumers’ purchasing power and of low demand from the UK on exports
- Yet, the immediate impact of the referendum was mild and activity could surprise to the upside in the coming months
- Credit will continue to revive on the back of the ECB’s ultra-loose monetary policy
- Core inflation will stay low but headline inflation will rapidly accelerate due to the energy inflation profile.
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