Outlook 2021 – Q4

In our previous publication, we believed that the economy would go from a stage of early recovery in activity to a mid-cycle stage, which implied a normalisation in the rhythm of growth.

This transition was also due to be accompanied by a triggering of normalisation of monetary policies, in particular that of the Fed. However, whilst the GDP of the major economic regions displayed strong growth in the second quarter, leading indicators seem to show a downturn in activity in the third quarter.

These statistics confirm our scenario up to now. However, certain factors seem to be increasing the deceleration of the economy. We must therefore analyse the figures which have been published within the major economic areas, but also the monetary policy trends of the central banks and, lastly, the risks which may burden the markets over the coming months. We will then take stock of the main asset classes.

What can we learn from the economic statistics ?

The growth figures from the second quarter show great acceleration in almost all major economic areas.

In the United States, GDP across 12 rolling months is displaying an increase of 12.2% compared with 0.5% in the first quarter. The Eurozone is also showing a strong increase of 13.8% compared with -1.2%. For the same period, the Japanese economy grew by 6.4% compared with -1.5%. For its part, Indian economic activity has displayed the strongest increase, with a rise of 20.1% in the second quarter compared with 1.6% in the first.

China is also displaying activity expanding to 7.9% in the second quarter of 2021. It should be noted, however, that its economy slowed in comparison with other regions. As mentioned in our previous publications, it should be borne in mind that China has a quarter in advance in terms of figures, as it locked down its economy three months earlier than other countries. Also, China gives us an indication of the future trajectory of world growth. In a certain way, it takes on the role of leading indicator.

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