Credit Agricole

Controlling the narrative and exploiting positive biases Studying Egyptian sovereign risk is a particularly challenging exercise: the Egyptian pound remains sensitive to investors’ expectations, guided by their perceptions and biases. The authorities are well aware of this and know which signals to communicate about. One such signal is the closely followed level of currency reserves, which, in reality, is becoming less and less relevant as a way to monitor liquidity…

A supply shock for the United States, a demand shock for EuropeIn our previous scenarios we highlighted the divergence in growth between the US economy and the economies of Western Europe. The US had exceeded its potential pre-pandemic pace, while GDP in the Eurozone, after a strong post-pandemic recovery, had landed on a modest pace, reopening a negative output gap.The Trump administration's trade policy draws a sharp contrast with the…

This scenario assumes a status quo in the tariff confrontation with the US on 4 June, ie, an across-the-board increase in tariffs to 10%, with the exception of exempted products, 25% on automobiles and 50% on steel. The risks associated with this central scenario are bearish. The stagnation scenario could materialise if the trade confrontation with the US were to intensify, if the competitiveness constraints were to bite further, if…

A fast-growing market Sixty-one percent of French people have taken food supplements at some point in the past 24 months, up from just forty-six percent in 2018. The trend is clear: French people are increasingly taking supplements to support and safeguard their day-to-day health.The top sellers? Products aimed at boosting vitality, strengthening immunity, improving digestion and managing stress, which on their own account for nearly 70% of sales at pharmacies.According…

Unemployment: the price of stability? Morocco is steeped in a culture of stability which, looking beyond recent events and shocks, seems to be rooted in an older DNA probably related to the country’s political structure and attachment to monarchy. However, as the economy slows, it has become legitimate to wonder whether this attachment to stability – a mark of trust for investors – has in some ways gradually become an…

Following very high-level negotiations, notably involving US Treasury Secretary Scott Bessent and China’s Vice Premier with responsibility for the economy He Lifeng, said to be close to President Xi Jinping, the two countries said they were lowering their additional import tariffs for 90 days, from 145% to 30% for the US and from 125% to 10% for China. They also committed to continuing talks on their economic and trading relationship. US-China…

The reality is that, when an economy is dependent on commodities, all of its variables are exposed to changes in the prices of those commodities. Fundamentally, then, the assessment of a country’s risk should not change because of market turmoil; rather, it should reflect the country’s ability to resist such turmoil. This would help reduce turbulence. Moreover, there is a practical tool for just that purpose: the fiscal breakeven. But…

The reality is that, when an economy is dependent on commodities, all of its variables are exposed tovolatility in their prices.. Fundamentally, then, the assessment of a country’s risk should not change because of market turmoil; rather, it should reflect the country’s ability to resist it. This would help reduceagitation. Fortunately, there is a practical tool for just that purpose: the fiscal breakeven. But this analysis does not necessarily fit…

A strong start to the year…First-quarter growth came in at 5.4%, ahead of consensus expectations. This growth was driven by industrial production, which quickened sharply in March, up 7.7% (compared with 5.9% in the January-February period), buoyed in particular by the solar panel, electrical appliances and components, and transport equipment sectors. However, the main positive surprise was retail sales, which were up 5.9% year on year in March, compared with 4%…

While the countries of Southeast Asia were among the big winners from the reconfiguration of global trade that took place during Trump’s first term, their trade surpluses have ballooned, raising fears that they could become the target of new measures.Adding to this uncertainty is the DeepSeek effect, which has diverted some investment to Chinese markets, largely shunned for months. Chinese equity markets have already attracted net capital inflows of $13…

Whereas Chinese public policy has traditionally targeted supply, notably through various forms of support for businesses (grants, tax credits, access to liquidity), and Xi Jinping used to regularly slam “welfare societies” where the welfare state and Keynesian mechanisms play a role, this shift in tone means there is now more emphasis on domestic consumption and demand.Last week, the Chinese authorities announced a plan to “vigorously boost consumption” – something they…

The findings of the Banque de France Monthly Business Survey – Start of March show that industrial activity continued to grow in February, contrary to last month’s expectations. Conversely, there was little growth in market services and construction. Business leaders expect modest growth in market services in March but little growth in industry and construction. There is some good news: after rising the previous month, the monthly uncertainty indicator has…

Mexico has gone to considerable effort, reducing migrant flows by 66%, putting soldiers on the border, handing drug traffickers over to the US authorities and proposing to match US import tariffs on Chinese goods. The country is even considering withdrawing from the Trans-Pacific Partnership (TPP).Mexican markets have proved relatively stable, with the peso even appreciating slightly, regaining some of the value it had lost since the US election. This reaction…

The DeepSeek phenomenon The first trend, as yet unconfirmed, is a “DeepSeek effect”. Unveiled on 20 January, this artificial intelligence, officially developed on a shoestring budget in comparison to the amount invested by the Americans in ChatGPT and Perplexity, has set share prices in the Chinese tech sector – which has had a rough ride over the past few years – soaring.First, at the end of 2020, there was the…

While China achieving its growth target is nothing new, the slowdown in a number of sectors (e.g. real estate and consumer goods) and the deflationary trend in the economy suggest that the reported growth number may be overstated. Worries over the strength and, above all, the sustainability of China’s economic model have not faded. There is also growing doubt about the transparency and credibility of China’s statistical machinery. Lastly, 2025…

Tantalum, tungsten, tin and gold have long been classed as “conflict minerals”1. But they are an even greater source of conflict now that everyone knows the climate and technology transitions are impossible without them. Simply put, they are the foundation stone of promises of growth, and therefore a major political priority: according to Guillaume Stechmann, we are now in the era of “metalpolitik”2. As for those countries that compete to…

  Why the slowdown?  The answer lies in inflation, which is extremely volatile in India. Driven by food prices, it has been oscillating between 5% and 6% for the past few months. Prices are putting pressure on wages, which are stagnating or even falling slightly, and thereby on household consumption, the traditional driver of India’s growth. Against this backdrop, the lack of momentum in the labour market is not helping: employees…

The economy is not expected to have grown at all in Q4 2024 due to the boost from the Paris Olympics washing out. This would put full-year 2024 growth at 1.1%, unchanged year on year, mainly driven by foreign trade and public spending, with private domestic demand (excluding inventories) stagnating. Average annual CPI inflation eased from 4.9% in 2023 to 2% in 2024. In 2025, growth is predicted to slow…

After agreeing to turn himself in to avoid “bloodshed”, the president was remanded in custody for 48 hours – a first in South Korean political history, and is still detiained. Tension has ratcheted up between two broad groupings: on the one hand, a presidential security service determined to protect Yoon at all costs, together with Yoon’s supporters, who see him as a hero who has fallen victim to North Korean…

Transactions vs. manipulation The first stage is media manipulation: what little protest Western governments have raised has been weak. There is a mix of explanations for this apparent apathy, the first of which is outright shock. At the heart of the Trump playbook (as demonstrated by many things Trump has said) is the strategy of cultivating a kind of “power through uncertainty” which vaguely echoes Nixon’s “madman theory”1 and which,…

Drawing the contours of the US (and therefore global) scenario requires making assumptions about both the scale of the measures likely to be implemented and their timing, depending on whether they fall within the prerogatives of the president or require the approval of Congress.As far as tariffs are concerned, Donald Trump's threats look like extreme pressure tactics. They call for an ‘intermediate’ scenario consisting of substantial increases, without however reaching…

In the midst of negotiations over the budget bill, part of which had already been rejected by the centre-left opposition, which holds a parliamentary majority, President Yoon Suk Yeol decreed martial law, prohibiting all political activity and rallies and putting the press under the control of the army. This extremely surprising and inordinate power grab – a tactic widely used by the authoritarian military regimes that ruled the country from…

Euphoria The metaverse, which harnessed the power of cutting-edge electronics to create highly immersive virtual spaces, promised a flourishing meta-economy worth $12.5 trillion, according to Goldman Sachs. This new creative economy, focused entirely on consumers and their avatars, was based on the premise that 33% of the digital economy would migrate towards these kinds of new environments of this type, and that they would grow at a rate of 25%…

The city’s hospitals have also reported a huge surge in the number of consultations for pulmonary infections and respiratory difficulties. Pollution is estimated to be responsible for around 12,000 deaths a year in New Delhi, equivalent to over 10% of all deaths in the city. The authorities are in denial, stubbornly claiming that “there is no conclusive data available to establish a direct correlation of death exclusively with air pollution”.…

In September, the governor of China’s central bank was first to announce a series of monetary easing measures, triggering high levels of market volatility as initial enthusiasm about the eagerly awaited response from the authorities gave way to disappointment over the lack of a fiscal component. The measures announced, mainly targeted at the real estate sector, included a cut in the reserve requirement ratio for banks, a reduction in residential…

Yet the industry powers the New Caledonian economy, accounting for 20% of private sector jobs and 94% of exports. A nickel giant… Yet New Caledonia is one of the world’s top three producers of nickel, accounting for 6% of global production in 2023, albeit far behind Indonesia (50%) and the Philippines (11%). In 2023, the nearly 150-year-old New Caledonian nickel industry mined 230,000 metric tons of nickel to produce just over…

What makes this transition even more complicated is that it coincides with both a growth crisis and a crisis of confidence: a kind of price that must be paid to clean up after past excesses, with an overinvestment bubble – notably in real estate – in the process of deflating. With volumes (of transactions and new construction starts) having adjusted sharply, prices are now falling. Faced with this deflationary spiral…

A review of the last few quarters, in which economic activity has slowed while continuing to grow Economic activity continued to grow in France in second-quarter 2024 but slowed slightly, up 0.2% in volume (qoq) after a 0.3% increase in the first quarter. However, the drivers of this growth proved rather disappointing, with foreign trade and government spending once again playing the starring role. In contrast, household consumption expenditure struggled…

How much leeway does China have? China’s initial response was swift: it announced that importers of brandy – which includes cognac – would have to put down security deposits with the Chinese customs authorities. However, charges will only be levied if the government approves a hike in import tariffs – potentially to as high as 35% – on these products. In reality, the only European country affected by this move is…

In the US, while the foundations of recent growth, tenacious beyond expectations, are showing some cracks, there are reasons to hope that they will not become too deep. On the one hand, we can count on the positive effects of an earlier cycle of monetary easing and, on the other, on the solid financial position of households, whose net worth has risen considerably thanks to strong gains in equities and…

An unprecedented package of measures These measures were expected, but do they go far enough? Following the start of the Fed’s monetary easing cycle and the rally in the yuan over the past month, the PBoC has regained some room for manoeuvre, which it has quickly exploited to support the real estate market. The first announcement was a 50-basis-point cut in the reserve requirement ratio (RRR) that dictates how much cash commercial…

Some visibility began to emerge in 2021, when the Kingdom added a key planning tool to Vision 2030: the National Investment Strategy (NIS). This gave an indication of the investments that would be needed to deliver on the plan’s ambitions and of the stakeholders involved in financing them: Vision 2030 calls for a total investment of USD3 trillion between 2019 and 2030 (around three times the country’s 2023 GDP). First stop:…

The vision of the benefits of globalisation, wherein free trade is a seen as a positive-sum game, very much in vogue in the 1980s and 1990s, has now given way to that of the potential dangers of global trade, a source of dependence and weakness. For the United States, with its chronic trade deficit, trade surpluses are something to be suspected; in this zero-sum mercantile world, they serve to legitimise…

A decision driven by pragmatic considerations… The problems afflicting Jakarta include overpopulation, pollution, subsidence and flooding. With 12 million people living there – 30 million if you include the entire metropolitan area – Jakarta is overpopulated. It’s one of the world’s most densely populated cities, with more than 16,000 people per square kilometre. Its residents suffer the effects of chronic traffic congestion and the air pollution that goes with it. Above…

These measures come on top of a long list of tariff and non-tariff barriers imposed since the trade war broke out between the two countries in 2018. The Peterson Institute for International Economics, a research organisation, estimates that 66% of Chinese exports to the US were already subject to customs duties averaging 19.3% before these latest announcements. The signing of the Phase 1 agreement and the election of Joe Biden…

In October 2023, the European Commission launched an ex officio (i.e. started by the Commission on its own initiative rather than at the request of industry) investigation into a sample group of Chinese manufacturers of electric vehicles (of the more than 300 that exist in total) and non-Chinese ones based in China. Manufacturers that agreed to participate in the investigation but were not included in the sample group could face…

We are now seeing a gradual radicalisation of extreme positions in each of the parties, rooted in identity issues. The Republicans are increasingly attracting white, religious, rural Americans, while the Democrats appeal more to racial, sexual and gender minorities and city-dwellers. At either end of the political spectrum there is mutual abhorrence between the religious far right, who see deconstruction and “wokeness” as undermining the foundations of Western civilisation and…

Baku is “meddling” and this meddling is “extremely harmful”. So said Gérald Darmanin after a New Caledonian separatist elected official signed a memorandum of collaboration with the Azerbaijani Parliament. Then there is the involvement of Tavini Huira’atira (formerly the Polynesian Liberation Front) in the Baku Initiative Group, created to “stand against colonialism”, which also counts among its members separatists from French Guiana, Martinique and Guadeloupe. As for Corsica, the Azerbaijani…

Confidence, or rather a lack thereof, is reflected throughout the economy: in retail sales (up 5.5% year on year in February, falling short of the consensus), private investment, imports (down 8.2% in February) and, above all, real estate indicators. Real estate is the main focus of concern: far from improving, key variables like housing starts, square footage sold and new construction have all deteriorated further in the early part of…

It was as though the country was hitting back after Fitch Ratings downgraded its sovereign rating from “stable” to “negative” as a result of concerns over its medium-term growth outlook, the impact of the real estate crisis and the sustainability of its public finances. Moody’s came to the same conclusion last December. Standard & Poor’s is the only agency to have confirmed China’s outlook as stable this year. Responding to…