Banque Eric Sturdza’s investment strategies are guided by extensive research. Through our investment committee, we look at trends in the world economy to determine how assets should be allocated across investment classes, geographical areas and currencies. Discover our latest thinking on the global economy, markets and investments in our Insight Report.

  1. Investment Focus, October 2019

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  2. Quarterly Perspectives, October 2019

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  3. Investment Focus, September 2019

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  4. Investment Focus, August 2019

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  5. Insight Report, July 2019

    5 Economic Policies Which Do Not Reach Their Targets

    It is tricky to criticise economic policies because our perception is approximate, but when applied to the economy, Chesterton's words above help us to distinguish between the short term, the immediate effect of a policy, and its knock-on effects. Additionally, it can illustrate the short-sightedness with which certain policies are implemented and the effects they may have on financial markets. This is the purpose of this note, which will analyse 5 policies …

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  6. Insight Report, June 2019

    Stimulating Monetary and Budget Policies: Near-Term Complacency, Medium-Term Doubts

    Since the Keynesian era, it seemed to be an accepted fact that stimulating fiscal policies was reserved for the bottom of the cycle in order to re-launch growth. Its resulting success was just part of the parcel. Today, in many countries, real rates are lower than GDP growth rates, causing an over-accumulation of capital. Germany, Switzerland and one or two smaller countries appear to be alone in their desire to reduce their debt because the United States, southern Europe, Japan, and China seem to be ignoring this lesson and are tolerating higher public deficits.

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  7. Insight Report, May 2019

    What to make of trade tensions with China and political tensions with Iran? Risks and opportunities in the markets

    Should we worry about the worsening US trade deficit? Is that not logical in light of the growth gap? Is it credible that a policy of raising tariffs can be effective? What risks are involved with these protectionist measures? What is the potential for retaliation by trade partner countries? On the other hand, should we fear a war with Iran or at the very least fear a sharp rise in oil prices? And above all, what are the consequences for financial markets, sectors, sentiment indicators, corporate investment, interest rates and currencies?

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  8. Insight Report, April 2019

    Rational expectations of growth and irrationally optimistic valutations

    Looking at market performances over the past four months, we can see a confirmation, an escalation and an inflection: - Confirmation of our diagnosis at the beginning of the year of rather slower economic activity, although far from a risk of recession in either the Western or the Emerging economies.

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  9. Insight Report, March 2019

    The United States and Europe in the face of Chinese imperialism

    Know your place in the world” (Confucius)

    In the midst of rivalries between powers, this saying by Confucius rings true, because this is the key issue for markets and geopolitics. There are many question marks, but Chinese history helps us understand and recent history illustrates the changes.

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  10. Insight Report, February 2019

    The global economy is not yet at risk of a recession and the central banks are prepared to avert such a possibility. The slowdown of the global economy is largely the consequence of worsening conditions in China, which are holding back the exports of countries such as Germany.

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  11. Insight Report, January 2019

    For almost all asset classes worldwide, 2018 will go down as the worst year since 2008, and December as one of the worst months since 1900 … Bear in mind that the four concerns which poisoned the market in the autumn have cleared: fears about oil prices and tensions with Iran are now a distant memory … Distant memories, too, are the idea of a pickup in inflation and a rise in long-term interest rates which would deter borrowing, fears surrounding the Italian budget, and fears about the poisonous relationship between the United States and China, although they could reappear in April.

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  12. Insight Report, December 2018

    In several countries, opposition to widening inequality and the spread of populism are undermining democracies and creating further uncertainty in financial markets. When forecasting trends in financial markets, we must take into account new factors such as political instability prevailing over economic trends, and social destabilisation hindering the implementation of economic programmes in some countries. We will endeavour to answer the question of a relationship between worsening inequality and the performance of financial markets first by analysing the consequences of shareholder pressure on listed companies since the early 1990s, and then by examining the consequences of the monetary policies implemented since the 2008 crisis.

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  13. Insight Report, November 2018

    Since the start of October, despite exceptional earnings growth in the United States (22%) and reasonable growth in Europe and Japan (around 10%), and although the economic outlook is still positive, the stock market indices of the major economies have fallen by about ten percentage points on average.

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  14. Insight Report, October 2018

    On the global stage, Donald Trump is apparently pursuing a two-fold objective, choosing bi-lateralism over multi-lateralism and destabilizing countries such as Iran and China, although we are bound to express doubts over his chances of success.

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  15. Insight Report, October 2018

    The Italian Budget: Italian Crisis or Eurozone Crisis?

    There is a country where joys are manifested, but false, and sorrows are hidden, but real.
    (La Bruyere)

    One immediately thinks of Italy today when reading these few lines! A country which in 2018 has not yet regained its GDP level of 2007, a country which since the year 2000 has seen no growth in its per capita GDP. And yet, this same country is rich, with one of the highest household savings rates in the Eurozone and a wealth/gross disposable income ratio far higher than that of Germany. Its manufacturing sector, as a percentage of GDP, is one of the largest in Europe together with Germany and Sweden, and it has a manufacturing trade surplus. Also, let’s not forget, Italy has a primary budget surplus making it one of the rare countries whose public debt/GDP ratio (130%) has hardly dropped since 2008 nor since even the creation of the Eurozone.

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  16. Insight Report, July 2018

    Market Stagnation in H1: A Pause in the Markets Rise or a Prelude to their Decline?

    While believing that America is indispensable to the world,
    I do not want to see it offered as a universal judge and policeman.

    (De Gaulle in Mémoires d’Espoir)

    General de Gaulle’s statement is still topical because, although there are four reasons accounting for the jitters on financial markets since the end of January, two of them, geopolitics and uncertainty regarding free trade, are due to statements by Trump. The third reason, a more restrictive monetary policy in the United States, is partly the consequence of the tax measures decided by Trump, and only the fourth reason concerns Europe and cannot be attributed to him.

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  17. Insight Report, June 2018

    Managing Priorities in an Indebted World with Weak Economic Growth

    Hell is truth seen too late” (Thomas Hobbes)

    Although world GDP hit $80,000 billion in 2017, world debt amounts to three times that figure. With $19,400 billion, the US represents almost a quarter of that world GDP, but the country’s GDP in 2017 is just 15 points up on 2007. Similarly, the GDP figures for Europe and Japan are 6 points and 5 points higher respectively than those in 2007. The emerging nations (China included) represent 58% of world GDP, but their debt ratios have also deteriorated. As growth is no longer what it used to be, financing welfare protection is becoming all the more problematic as Governments can no longer evade the problem simply by opting for debt. To accept this view is to be realistic, while to deny it is to slip into populism and demagogy, to kick the problem into touch and selfishly transfer the burden onto younger generations who already find themselves in a less favourable situation than their elders.

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  18. Insight Report, April 2018

    The Fragile and the Resilient

    Among the nagging questions are: uncertainty about free trade, concern over the situation in Syria, the forthcoming renewal of the nuclear agreement with Iran, and finally doubts about the longevity of the growth cycle.

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  19. Insight Report, March 2018

    Protectionist Threats and Risks for the Markets

    Wars begin when you will, but they do not end when you please.” (Machiavelli)

    The protectionist measures that have been announced are modest but there are still great fears, because the markets tend to agree with Machiavelli’s words and fear an escalation.

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  20. Insight Report, January 2018

    Every certainty is a lie” (Henri Poincaré)

    The probable. The possible. The hypothetical. The risks: To answer the question of this title, we have a guide, the words of Henri Poincaré, quoted in the title and set out in his book entitled “Scholars and Writers”, and four factors: the probable, i.e. regions or sectors to be over-weighted; the possible, i.e. neutral weightings; the hypothetical, which may represent investment opportunities; and the risks, which will require underweighting.

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  21. Insight Report, December 2017

    The difficulty lies not so much in developing new ideas as in escaping from old ones” (John Maynard Keynes)

    Should we invest in emerging stock markets? Over several years, the economic growth differential is in favour of emerging countries, but the stock market performance differential is in favour of developed countries. So can a market catch-up be expected? Or is there a tangible explanation for this underperformance? Is not the convergence between emerging countries and developed countries an old idea from which we should try to escape? This is the aim of this report.

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  22. Insight Report, November 2017

    Outlook for the Global Economy and Financial Markets

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  23. Insight Report, October 2017

    Pessimism never won any battle” (Dwight Eisenhower)

    Following a market low reached in March 2009 (an economic crisis which in the euro zone persisted until 2013) and a political crisis attested by the surge of populist parties, we are now in a more favourable period. Global growth of 3.7% is expected this year, benefiting most countries, there is practically full employment in many of the major countries …

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  24. Insight Report, September 2017

    Economic Outlook and Investment Strategy

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  25. Insight Report, June 2017

    The man who meditates not, lives in blindness; the man who meditates lives in darkness” (Victor Hugo)

    Economic growth is something of a Janus. Without it there can be no increase in wealth, no alleviation of poverty in the world. Yet with it, inequalities increase, as not everyone can march to the rhythm of the implications of the technological changes taking place … We will attempt to analyse the changes observed since the 2008 crisis, three major challenges we face, and lastly four policies that should be avoided.

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  26. Insight Report, March 2017

    Even the stones that lie across your path can be built into something beautiful” (Goethe)

    Never have the effects of a wave of innovations spread so rapidly to every country and every sector, from manufacturing to services, from the automotive industry to finance, and even transport and tourism. Never has a wave of innovations affected so many workers, first the least skilled, employed in repetitive tasks, and then increasingly qualified professionals such as lawyers and surgeons.

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  27. Insight Report, January 2017

    Remember to always be daring” (Gabriele d’Annunzio)

    Investment strategy — We will analyse consecutively the different stock markets, currencies, interest rates, the oil market, and other major commodities.

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  28. Insight Report, December 2016

    How little time is needed to change everything” (Victor Hugo)

    Global economic outlook — If there is one lesson worth reflecting on regarding 2016, it is that stated in the quotation from Victor Hugo above. Who could have thought that financial markets would so easily or so rashly absorb such major shocks as Brexit, the election of Donald Trump and the ‘No’ victory in the Italian referendum? So we approach 2017 tentatively.

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  29. Insight Report, November 2016

    People like changing masters, always hoping to find someone better” (Machiavelli)

    The United States post-election — This note aims to summarize the main aspects of Donald Trump’s programme and their implications, and also to show that the US economy is not on the eve of a recession: the Fed should be able to raise its policy rates.

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  30. Insight Report, October 2016

    Being contested means being recognized” (Victor Hugo)

    Is the euro to be blamed? Is the euro doomed? To answer the questions in the title, we will pose the question of whether monetary union is positive for the integration and international presence of Europe and whether it can boost growth. Likewise, we will raise questions about the ECB, whose mandate is to combat non-existent inflation and not to promote growth, and about the independence of an ECB which takes decisions that have political implications.

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  31. Insight Report, September 2016

    Following the Brexit vote, in this report, economist Bruno Desgardins reflects upon the reasons behind it. He analyses the implications in short and long term for both the European Union and for Britain as a result of this decision …

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  32. Insight Report, June 2016

    Europeans will be saved to the extent that they are aware of their solidarity
    faced with the same danger.
    ” (Robert Schuman in Pour l’Europe)

    In this report, economist Bruno Desgardins looks at the history of the United Kingdom’s relationship with the European Union and addresses the implications of a possible Brexit. The report also looks at some of the reforms needed within the European Union to avoid its fragmentation or dissolution.

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  33. Insight Report, May 2016

    It isn’t so much that hard times are coming; the change observed
    is mostly soft times going.
    ” (Groucho Marx)

    In this report, economist Bruno Desgardins addresses 11 questions surrounding the world economy and markets including the risks associated with Brexit, options for China, and the price of oil and other commodities. The report also looks at the economic situation in the USA, Brazil and Japan; and considers the effectiveness of monetary policies of the central banks.

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  34. Insight Report, April 2016

    How is it that the clouds still hang on you? ” (Hamlet)

    Since 1995, there has been a surge in the number of multinational firms, and years of global trade growth at twice the pace of GDP growth. To symbolize a world of vanishing differences between peoples and cultures, we could adopt the expression of a Wall Street Journal editorialist, Thomas Friedman, who in 2006 published a book entitled The World is Flat, or use the famous saying by General Sertorius to Pompey in Corneille’s tragedy The Death of Pompey: “Rome n’est plus dans Rome, elle est partout où je suis” (Rome is no longer in Rome, it is wherever I am).

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  35. Insight Report, February 2016

    The prosperity that reigned between 2000 and 2007 was an illusion nurtured by growing lending and the real-estate boom, while that from 2009 through to 2015 has been fed by liquidity injections and massive stimulus in China.

    The stagnation of the US index since 2000, once corrected for inflation, reflects this downturn in growth after 18 years of bull markets (1982/2000). One reassuring factor is that the recent sharp fall in stock market indices is partly a result of forced sales by sovereign funds and has little to do with the economic outlook in the OECD countries. If there is a factor that should be of some concern, however, it is that if this slide should continue, it might cause a loss of confidence and something of a wait-and- see attitude among investors.

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  36. Insight Report, January 2016

    … and the weird world rolls on” (Paul Auster)

    Growth in the world economy remains weak at under 3%, the expansion of Emerging countries has been slowing down since 2011 and pessimism prevails among economic actors, although we are seeing a welcome reduction in the “savings glut” in many countries, and therefore a considerable transfer of wealth from the commodity-producing countries and China to the consumer countries. If we accept the idea that high oil prices held back world growth from 2012 through to June 2014, and that the excessively high Chinese investment rate in recent years, at close to 50% of GDP, has been spreading deflationary pressures around the globe and hitting margins in many sectors, then stock markets should only suffer for a time from the drop in oil prices and the shift of the Chinese model from investment-driven to consumption-driven.

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