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BFW digitaal / RBF numérique 2021/01

  • Were financial markets (in)sane in 2020?

    Thursday 14/1/2021
    Mikael Petitjean
    Mikael Petitjean

    Relative to other global institutions, financial markets performed remarkably well in 2020 and investors ought not to be ashamed of their reactions relative to consumers. It would be a terrible abuse of language to characterize 2020 as being financially irrational. The Covid crisis in 2020 was one of the most orderly crises ever. The damage and the reward across companies, sectors, and countries made a lot of sense. Although there are pockets of extremely high valuations in the tech sector, humility has always been a virtue when it came to valuing tech firms. While stocks are very expensive in absolute terms especially in the US, they are not relative to governmental bonds. But there is a big caveat to all this: the rise in the monetary supply since 2010 has been so incredible that markets have dived deep in unchartered waters. Central banks must find our way back to homeland.

  • A Policy Revolution and a Regime Change

    Thursday 14/1/2021
    Elga Bartsch / Jean Boivin / Philipp Hildebrand
    Bartsch, Boivin & Hildebrand

    The macroeconomic policy revolution accelerated by Covid-19 implies that central bank policy rates and nominal bonds yields will be less responsive to rising inflation pressures over the medium-term. The potential for higher consumer price inflation over the medium-term is still underappreciated, we think, because the new central bank policy frameworks and global cost pressures are not fully reflected in private sector inflation expectations. Neither is the shift towards a closer coordination between monetary and fiscal policy. Combined with the fact that bond yields remain close to their effective lower bound and that authorities need to rely to a greater extent on fiscal policy, the role of government bonds in investment portfolios as a hedge against risk-off events such as the one in March 2020 is increasingly challenged. In contrast to past inflation episodes, less-responsive nominal interest rates and bonds yields mean that government bonds are also becoming less effective as store of value. 

  • Vaccine Economics

    Thursday 14/1/2021
    Ana Boata / Maxime Lemerle
    Boata & Lemerle

    The Covid-19 vaccine will supercharge global growth in 2021, but short-term headwinds, and a complete recovery only by 2022, will create transition risks.

    In mid-2021, despite the sizeable hurdles on the demand (vaccination skepticism) and supply sides (production & distribution bottlenecks), we expect the vaccination of vulnerable populations (20-40% of the total) to be completed, setting the stage for a buoyant growth rally in H2 2021.

    Policymakers will particularly be under scrutiny, as they will continue to run the show again in 2021-22.

    In the real economy, cyclical sectors (including energy, metals, and automotive) to see strong catch-up growth as soon as Q2 2021 as the recovery starts to unfold and economic uncertainty recedes.

  • Focus Conjoncture - L’économie toujours sous l’emprise du COVID-19

    Thursday 14/1/2021
    Anouar Boukamel
    Boukamel

    Deux fois par an, la Fédération des entreprises de Belgique (FEB) interroge ses fédérations sectorielles pour mesurer la température économique. Sur la base de cette enquête (menée durant le mois de novembre), elle dresse le bilan de la situation économique belge et ses prévisions pour le semestre à venir.