Written on 25 February 2013.
EDHEC FE Event
The financial crisis and the macroeconomic environment were the focus for the second edition of the EDHEC FE Events, organised on February 12th. The key spokesperson wasTristan Perrier (CFA), strategist for a large asset management firm. Daniel Haguet, professor of finance at EDHEC, and the mediator of the conference, kicked off the gathering by introducing Tristan Perrier before handing over the stage to him.
Tristan Perrier started by summarising the current environment before shifting his focus towards the macroeconomic outlook. A quick look at the sovereign bond markets since January 2012 showed the divergence among the countries in the European Union—countries hardest hit by the crisis and safe havens. This, as he explained, resulted in the European Central Bank’s (ECB) announcement that it would do “whatever it takes” to save the euro and that it could buy Spanish and Italian debt to keep yields down. Furthermore, an analysis of central banks’ monetary policies shows that the Federal Reserve (Fed) and the Bank of England (BoE), rather than the ECB, have bought a substantial amount of government debt. He pointed out that the eurozone’s financing needs are still very great, including roughly €300bn in medium- and long-term gross bond issuance for Italy and Spain in 2013.
He also looked at the macroeconomic environment in the eurozone, the United States, and in emerging markets. Focusing more closely on the eurozone, he noted that recession is expected to continue in the region in early 2013, although with large differences from one member state to another. He went on to discuss the current policies that Eurozone countries are trying to implement to improve growth and reduce the imbalances amongst member nations. He described structural reform, including improving competitiveness, suppression of rigidities, tax reforms, and local government reforms.
He brought the presentation to a close discussing the current market cycle for major asset classes. He concluded by suggesting that the current market dynamics remained positive and that world growth was, at this stage, enough to drive a moderate increase in corporate growth.
The presentation was followed by a Q&A session.