Hervé Goulletquer, Head of FIM research, opened the conference by explaining that the markets are currently going through a period of change. The macroeconomic environment is changing (with the “advanced” countries seeing less growth), regulations are becoming stricter, the inevitable tightening of economic policy is a poorly understood phenomenon and the form taken by globalisation is changing. In the final analysis, legibility is diminishing and macroeconomic volatility is going to increase. All of this will incite the markets to remain at least partially on the defensive.

Isabelle Job, Head of the Macroeconomic unit, provided an update on the economic recovery. During the crisis there was a very sharp contraction in demand. We are currently seeing a recovery in global demand, but several phases will be required before a self-sustaining recovery is reached. In fact, several structural factors are slowing down this recovery, such as employment which is slow to pick up and the difficulty in reviving credit.

Orlando Green, Interest Rate Analyst, explained that in Europe we cannot talk of a durable consolidation of government accounts as long as certain countries, such as Spain and Portugal, have not strengthened their economic structures and returned to a certain pace of growth. In the United States, the Fed is very cautious and betting on a weak recovery; the bond markets have adopted the same stance. However, in terms of flows, the demand for government bonds is gradually abating, even though supply continues to be abundant. Upward pressure on long rates cannot fail to appear.

Daragh Maher, Deputy Head of Foreign Exchange Strategy, explained that the ECB is forced to apply the same policy to all European countries without taking into account their growth differences. That may become a significant problem especially if it becomes a question of recession versus growth and not simply one of a divergence in expansion rates. With regard to the main currencies, he said in particular that purchases of dollars have taken off while the euro and the yen are losing appeal. The dollar is once again trending upward against these two currencies.