Markets 360

Trevor Allen, Head of Sustainability Research Jeffrey Schultz, Chief CEEMEA Economist Sumati Semavoine-Jain, Sustainability Research Analyst  Niccolo Carrara, Emerging Markets EconomistBNP Paribas London Branch | Global Markets (Recorded 04 January 2024) • There are significant pockets of vulnerability in countries’ ability to respond to physical risks related to climate change, according to our new BNP Paribas climate adaptation readiness scores. • Some of the weakest scores are in south Asia, as well as in parts of sub-Saharan Africa and Latin America. • Agriculture’s exposure to water stress is a potential source of global inflation volatility. • In the short term, a potentially strong El Niño episode might keep food prices elevated. • In the medium term, without sufficient adaptation, the agricultural sector might suffer unexpected losses and cost pressures due to climate change. • EM governments face the prospect of responding to more frequent food supply shocks and investing in climate adaptation against the backdrop of severely depleted fiscal capacity.For more information, please refer to : https://bnpp.lk/EyODgb For country-specific disclaimers and legal notices, please refer to https://globalmarkets.bnpparibas.com/gm/home/Markets_360_Country_Specific_Notices.pdf   Hosted by Ausha. See ausha.co/privacy-policy for more information.

With: Niccolo Carrara, Economist, Emerging Markets | BNP Paribas London Branch   This podcast was recorded  9 November 2023 Artificial intelligence provides some threats to emerging markets, we think. To avoid sharp distortion across countries, regulation requires harmonisation at the global level, which could be hard to find amid US-China geopolitical tensions. An unequitable distribution of benefits from AI, potentially aggravating income inequality, is likely to be a major hurdle. Notwithstanding these threats, AI also offers scope for meaningful productivity gains in some sectors, particularly those that are able to adapt quickly. We argue it is time for some EM to broaden their focus beyond manufacturing-based export-led growth For more information, please refer to : https://bnpp.lk/EyODgb   For country-specific disclaimers and legal notices, please refer to https://globalmarkets.bnpparibas.com/gm/home/Markets_360_Country_Specific_Notices.pdf  Hosted by Ausha. See ausha.co/privacy-policy for more information.

Carl Riccadonna, Chief Economist, US Andrew Schneider, Senior Economist, US  Andrew Husby, Senior Economist, US   BNP Paribas | Global Markets (Recorded 10 October 2023)   The US consumer has powered ahead this year, but we see several factors that could slow spending in the near term. Most lower and middle-income households have depleted their excess savings, while interest payments as a share of income look set to approach levels last seen ahead of the global financial crisis.  We expect consumer spending growth to slow sharply this quarter, to just 0.5% q/q saar from a 3.6% Q3 pace. For more information, please refer to : https://bnpp.lk/EyODgb    For country-specific disclaimers and legal notices, please refer to https://globalmarkets.bnpparibas.com/gm/home/Markets_360_Country_Specific_Notices.pdf   Hosted by Ausha. See ausha.co/privacy-policy for more information.

Trevor Allen, Head of Sustainability Research  Sumati Semavoine-Jain, Sustainability Research Analyst   BNP Paribas London Branch | Global Markets (Recorded 18 August 2023)  Physical climate risk is rising in intensity and frequency globally.  (Re)insurance plays the essential role of shock absorber, protecting from a natural disaster’s second-round impacts on economic activity and the wider financial system.  However, given increasing and more chronic insured losses, the protection gap is rising, leaving parts of the economy and of the world highly vulnerable.  There is room for (re)insurers, high-risk industries, public sector and regulators to mitigate risk and seize opportunities, we argue.  For more information, please refer to : https://bnpp.lk/EyODgb   For country-specific disclaimers and legal notices, please refer to https://globalmarkets.bnpparibas.com/gm/home/Markets_360_Country_Specific_Notices.pdf   Hosted by Ausha. See ausha.co/privacy-policy for more information.

Carl Riccadonna, Chief Economist, US Andrew Schneider, Senior Economist, US  Yelena Shulyatyeva, Senior Economist, US Andrew Husby, Senior Economist, US  BNP Paribas | Global Markets (Recorded 03 August 2023)  We expect household excess savings – which has bolstered consumer spending over the last eighteen months – be depleted by the end of this year. Watch for more price elastic consumer spending as households become increasingly dependent on paycheck income. For more information, please refer to : https://bnpp.lk/EyODgb  For country-specific disclaimers and legal notices, please refer to https://globalmarkets.bnpparibas.com/gm/home/Markets_360_Country_Specific_Notices.pdf  Hosted by Ausha. See ausha.co/privacy-policy for more information.

Pamela Díaz Loubet, Economist, Mexico Debora Luncaorte, Economist, Mexico  BNP Paribas | Global Markets (Recorded 10 July 2023)  We discuss Mexico’s disinflation process, its risks and implications for the monetary policy path in  the country. For more information, please refer to : https://bnpp.lk/EyODgb  For country-specific disclaimers and legal notices, please refer to https://globalmarkets.bnpparibas.com/gm/home/Markets_360_Country_Specific_Notices.pdf   Hosted by Ausha. See ausha.co/privacy-policy for more information.

Carl Riccadonna, Chief Economist, US Yelena Shulyatyeva, Senior Economist, US Andrew Schneider, Senior Economist, US BNP Paribas | Global Markets (Recorded 27 June 2023)  Analysts looking for an easing of lending conditions in the 2nd quarter may be in for a surprise based on the latest banking conditions survey from the 11th Fed district. Ongoing financial sector stress poses a brisk head wind to economic activity and may very well factor into monetary policymakers’ assessment of the appropriate fed funds terminal rate.  For more information, please refer to : https://bnpp.lk/EyODgb  For country-specific disclaimers and legal notices, please refer to https://globalmarkets.bnpparibas.com/gm/home/Markets_360_Country_Specific_Notices.pdf   Hosted by Ausha. See ausha.co/privacy-policy for more information.

Sumati Semavoine-Jain, Sustainability Research Analyst  BNP Paribas | Global Markets (Recorded 13 June 2023)  Water has been rising on the agenda of sustainable investors this year. We address some of the main questions/challenges in this episode. Access to clean freshwater has generally been taken for granted, leading to wastage and pollution. However, with increasing supply chain transparency and greater focus on water quality, practices are coming under closer scrutiny. A number of opportunities exist in the space, with room for innovation throughout the water cycle, adoption of circular business models, and public-private partnerships.  For more information, please refer to : https://bnpp.lk/EyODgb  For country-specific disclaimers and legal notices, please refer to https://globalmarkets.bnpparibas.com/gm/home/Markets_360_Country_Specific_Notices.pdf   Hosted by Ausha. See ausha.co/privacy-policy for more information.

Niccolo Carrara, Emerging Markets Economist  BNP Paribas | Global Markets (Recorded 07 June 2023)  Our property update suggests there are still downside risks to house prices globally, especially in a scenario of tighter-than-expected financial conditions. Residential housing prices remain elevated in level terms, hurting affordability and investor sentiment. Our indicator suggests housing unaffordability is particularly acute in Southeast Asia, with a potential knock-on political and socio-economic effect. Economies with high levels of household debt and a large share of it issued at floating rates, such as in South Korea, are also more vulnerable to higher mortgage burdens, and at greater risk of a wave of defaults. With rate cuts an obvious prerequisite for lower mortgage rates, demand for borrowing is likely to weaken further in developed markets, where central banks have not yet completed their tightening cycles. For more information, please refer to : https://bnpp.lk/EyODgb  For country-specific disclaimers and legal notices, please refer to https://globalmarkets.bnpparibas.com/gm/home/Markets_360_Country_Specific_Notices.pdf   Hosted by Ausha. See ausha.co/privacy-policy for more information.

Jeffrey Schultz, Chief Economist, Middle East and Africa  Nic Borain, Politics Analyst, South Africa  BNP Paribas | Global Markets (Recorded 07 June 2023)  South Africa is accused by US ambassador of helping to arm Russia, as several negative risk (loadshedding) spike     For more information, please refer to : https://bnpp.lk/EyODgb  For country-specific disclaimers and legal notices, please refer to https://globalmarkets.bnpparibas.com/gm/home/Markets_360_Country_Specific_Notices.pdf   Hosted by Ausha. See ausha.co/privacy-policy for more information.

Mario Castro, Senior FX & Rates Strategist  A weak dollar trend coupled with attractive carry has made LatAm markets attractive again. We expect the trend to continue but with some bumps down the road.  BNP Paribas | Global Markets (Recorded 24 May 2023)  For more information, please refer to : https://bnpp.lk/EyODgb     For country-specific disclaimers and legal notices, please refer to https://globalmarkets.bnpparibas.com/gm/home/Markets_360_Country_Specific_Notices.pdf  Hosted by Ausha. See ausha.co/privacy-policy for more information.

Trevor Allen, Head of Sustainability Research  Megan Dale, Sustainability Research Analyst   Sumati Semavoine-Jain, Sustainability Research Analyst   BNP Paribas London Branch | Global Markets (Recorded 18 May 2023)  In this episode, we look into the latest developments in Sustainable Finance, reviewing: the progress seen at Earth Day, 2023 sustainable bond issuance and conclusions from the recent pilot testing of the TNFD.   For more information, please refer to : https://bnpp.lk/EyODgb   For country-specific disclaimers and legal notices, please refer to https://globalmarkets.bnpparibas.com/gm/home/Markets_360_Country_Specific_Notices.pdf   Hosted by Ausha. See ausha.co/privacy-policy for more information.

With:  Carl Riccadonna, Chief Economist, US  Yelena Shulyatyeva, Senior Economist, US Andrew Schneider, Senior Economist, US   Andrew Husby CFA, Senior Economist, US   BNP Paribas | Global Markets (Recorded 10 May 2023)  The latest data indicated banks tightened standards to an even greater degree than an already-elevated intensity at the end of last year and across all major categories. The breadth of tightening was only surpassed during the Global Financial Crisis (GFC) and the Covid pandemic.  The BNP Paribas US Financial Conditions Index, a quantitative tool to signal the relative restriction of financing conditions facing investors and the real economy in the US, currently augurs sharply slowing growth in economic activity in the second half of the year, to a level that is broadly consistent with our forecast for recession in H2 2023.  Inflation continues to run hot, but the increasingly well-defined peak in core services (and core services ex-shelter) should be welcome news to policymakers looking for further justification to pause rate increases and assess incoming information. For more information, please refer to https://markets360.bnpparibas.com   For country-specific disclaimers and legal notices, please refer to https://globalmarkets.bnpparibas.com/gm/home/Markets_360_Country_Specific_Notices.pdf   Hosted by Ausha. See ausha.co/privacy-policy for more information.

With:  Jeffrey Schultz, Chief Middle East and Africa Economist | BNP Paribas South Africa Branch Niccolo Carrara, Economist, Emerging Markets | BNP Paribas London Branch This podcast was recorded 2 May 2023 EM food prices look set to remain well above levels consistent with inflation targets even as base effects suppress year-on-year rates of price growth.  We expect inelastic food demand, supported by post-pandemic recoveries, to combine with supply risks, including export restrictions from large producers and constraints on energy-dependent agricultural inputs.  As food prices matter a great deal for EM inflation, central banks face a tough time taming inflation expectations.  Central banks’ task will be even harder if the risk of social turmoil resulting from elevated food prices tempts governments to step up fiscal subsidies.  Our food vulnerability indicator highlights particular potential for pressure in pockets of CEEMEA and EM Asia.  Fiscal responses to high food prices would also risk driving up risk premia as markets reassess EM fiscal sustainability amid higher debt-servicing costs. For more information, please refer to https://markets360.bnpparibas.com   For country-specific disclaimers and legal notices, please refer to https://globalmarkets.bnpparibas.com/gm/home/Markets_360_Country_Specific_Notic  Hosted by Ausha. See ausha.co/privacy-policy for more information.

With:  Marcelo Carvalho,  Global Head of Economics Dani Stoilova, Economist, Europe Mariana Monteiro, Economist, Europe Megan Dale, Sustainability Research Analyst    BNP Paribas London Branch  | Global Markets (Recorded 25 April 2023)  The proposed Green Deal Industrial Plan would be net positive for the EU outlook, in our view, supporting private investment and new green and clean-tech jobs. Coming on top of the NextGenerationEU programme and other existing funds, the EU has the means to compete with the US in the green transition. A subsidy race or ‘green trade war’ looks unlikely, due in part to the prospect of a limited US–EU trade deal. However, we think the EU could do more to improve the efficiency of its funding, to address perceptions that it is on the back foot relative to the US, and to maintain cohesion between its member states. To the extent that this is another force supporting a trend of reshoring, the overall effect is likely to be inflationary over the next few years. At a sector level, we think EU plans stand to benefit solar in particular, but firms will require greater detail around these subsidies before committing to significant investments. For more information, please refer to https://markets360.bnpparibas.com   For country-specific disclaimers and legal notices, please refer to https://globalmarkets.bnpparibas.com/gm/home/Markets_360_Country_Specific_Notices.pdf   Hosted by Ausha. See ausha.co/privacy-policy for more information.

With:  Jason Lui, Markets 360 APAC Coordinator and Head of APAC EQDStrategy   Jacqueline Rong, Economist, Europe   Christopher B Li, Credit Trading Desk Analyst   BNP Paribas | Global Markets (Recorded 11 April 2023)  China’s economy and banking system are largely insulated from recent banking stress in DM countries, in our view.   Chinese policymakers’ campaigns against financial risks in the past five years and the PBoC’s cautious monetary policy stance have improved the health of the country’s banking sector.   The spillover of global credit stress to China’s banking system currently looks limited, thanks to abundant local liquidity and the market-friendly regulatory actions, though the property sector remains the weak link in accessing refinancing.   For more information, please refer to https://markets360.bnpparibas.com   For country-specific disclaimers and legal notices, please refer to https://globalmarkets.bnpparibas.com/gm/home/Markets_360_Country_Specific_Notices.pdf   Hosted by Ausha. See ausha.co/privacy-policy for more information.

With:  Spyros Andreopoulos, Senior Economist, Europe  Dani Stoilova, Economist, Europe  BNP Paribas | Global Markets (Recorded 03 April 2023)  The ECB might find the eurozone’s resilient labour market a tough nut to crack. After all, we see three factors behind the tight labour market: strong and resilient aggregate demand, labour shortages due to demographics and mismatch. As a result, the ECB may have to suppress demand sufficiently to deal with the cyclical reasons for labour market tightness as well as the structural ones. The bottom line is that the labour market is likely to be a key factor sustaining the ECB’s tightening cycle for a while longer. For more information, please refer to https://markets360.bnpparibas.com   For country-specific disclaimers and legal notices, please refer to https://globalmarkets.bnpparibas.com/gm/home/Markets_360_Country_Specific_Notices.pdf   Hosted by Ausha. See ausha.co/privacy-policy for more information.

With:  Pamela Díaz Loubet, Economist, Mexico BNP Paribas | Global Markets (Recorded 27 March, 2022)  We discuss Mexico’s monetary policy as the cycle nears its end. In particular, how the reaction function has changed after the financial turmoil and the extent to which the Fed might have influence over Banxico’s decisions.  For more information, please refer to https://markets360.bnpparibas.com   For country-specific disclaimers and legal notices, please refer to https://globalmarkets.bnpparibas.com/gm/home/Markets_360_Country_Specific_Notices.pdf   Hosted by Ausha. See ausha.co/privacy-policy for more information.

With: Trevor Allen, Head of Sustainability Research   Paola Lamedica, Head of Credit ESG and Derivatives Strategy   Paola addresses climate transition and examines to which extent corporates and sectors are progressing towards their net zero pledges.  Intentions are good, excellent even but it’s reality that lets us down. Some sectors are worse than other, especially within high-emitters.  We analyses whether investors are currently positioned to take into account this dievergence between targets and progress.  We also highlights which corporates in O&G, Chemicals and Mining stand out as making good progress towards their targets and which are completely off track. BNP Paribas London Branch | Global Markets (Recorded 07 March 2023)  For more information, please refer to : https://bnpp.lk/EyODgb   For country-specific disclaimers and legal notices, please refer to https://globalmarkets.bnpparibas.com/gm/home/Markets_360_Country_Specific_Notices.pdf   Hosted by Ausha. See ausha.co/privacy-policy for more information.

Trevor Allen, Head of Sustainability Research   Sumati Semavoine-Jain, Sustainability Research Analyst   With the IRA, the US looks to boost domestic growth, tackle supply chain vulnerabilities and offer more policy certainty, mostly in the form of tax credits. The US approach is in stark contrast to that of the EU, adopting more of a 'carrots without sticks' strategy, in our view. In turn, it might push the EU to provide more ‘carrots’. We expect the IRA to offer a competitive advantage to companies with business activities that focus on energy transition, and those with a local footprint. BNP Paribas London Branch | Global Markets (Recorded 06 March 2023)     For more information, please refer to : https://bnpp.lk/EyODgb   For country-specific disclaimers and legal notices, please refer to https://globalmarkets.bnpparibas.com/gm/home/Markets_360_Country_Specific_Notices.pdf   Hosted by Ausha. See ausha.co/privacy-policy for more information.