In our latest analysis released at the beginning of the year, we had laid out our medium-term outlook as a correction of the business cycle, including an economic slowdown, yield curve inversion, a return to lower bound policy rates, and subdued inflation prints. The global shocks resulting from the eruption of the coronavirus pandemic have significantly altered the sequence of economic and financial phases, shortened the timeframe and expanded the scale of the ripple effect. Certainly, global trade will decline as fault-lines along the supply chain surface, and whole economies come to a standstill. Monetary authorities have acted swiftly to assuage the markets, having learned the lessons from the GFC. The insidious deflation risk has become a reality because of the freefall of oil prices. Even if the main reason has been the oil producers’ price war, it is in itself having a meaningful impact in energy and financial sectors worldwide.

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RC - Author - DEFEND Monica
Head of Amundi Investment Institute & Chief Strategist, Member of Amundi’s Executive Committee
Head of Quant Solutions, Multi Asset Solutions
CFA, Senior Quantitative Analyst, OCIO Solutions
RC - Author - PORTELLI Lorenzo
Head of Cross Asset Strategy, Head of Research at Amundi Italy, Amundi Investment Institute