Weekly Economic Insights - 11 March 2019

Macro Highlights - 3/14/2019

Highlights of the week

Economist insights: A very dovish ECB once again, further fiscal stimulus in China, deterioration in the US trade balance

European Central Bank

  • The ECB confirmed that it does not intend to raise its key rates in 2019…
  • … and announced new refinancing operations, the TLTROs III, as we were expecting
  • This could contribute to flattening eurozone yield curves further. Furthermore, the TLTROs III could result in an increase in liquidity and support GDP growth


  • The Chinese government once again lowered its GDP growth target, to 6.0-6.5% for 2019...
  • … while announcing additional fiscal stimulus measures to favour private sector companies
  • These elements underpin our analysis according to which Chinese authorities intend to support the economy without increasing financial imbalances
  • We thus continue to expect a slight acceleration in GDP growth in China in H1 2019

United States

  • The trade deficit deepened to USD621.0 billion in 2018, following USD552.3 billion in 2017, mainly due to a rise in imports of capital goods and industrial supplies…
  • …in line with our scenario of an acceleration in US GDP growth to 2.9% in 2018 and the increase in the growth differential with other countries worldwide

Focus: Overview of the energy transition

  • Although China is the largest energy consumer in the world, the United States and the European Union have much higher consumption per capita…
  • … however, the International Energy Agency predicts that world energy consumption will increase by 25% by 2040, especially in emerging countries, led by India and China
  • If the signatory countries of the Paris climate change agreement want to limit global warming to 1.5°C, CO2 emissions would have to be reduced by 45% by 2030 and carbon neutrality achieved by 2045-2055
  • The two main means of action will be to increase the share of renewable energies in the energy mix and improve energy efficiency

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