Limping out of the lockdown

As the Covid-19 pandemic has triggered shutdowns around the world, the global economy is headed for its worst slump in post-war history. With severe containment measures extending into May, we now pencil in a contraction of global GDP by 3.5% this year.


  • As new Covid-19 cases flatten out, governments prepare for the exit from lockdowns. This will ease economic pain. But it is a fragile enterprise, given the risk of resurging infections.
  • The global economy is headed for its worst slump since WWII, with the recovery set to be protracted and disinflationary pressures likely to grow.
  • Bold and timely responses by fiscal and monetary policy help to cushion the fallout, supporting risk sentiment and Credit markets in particular.
  • European leaders seem set to agree only on a soft form of intra-European burden sharing. EMU sovereign risk will remain largely in the hands of the ECB, which seems determined to deliver.

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The United States has officially notified the withdrawal from the World Health Organization.
After the rescue. As we enter the 20H2, Covid-19 is still lurking around, and influ-encing our social and economic behaviours. The number of new daily cases globally is at a new high.
Market Compass July 2020
Edited by the Macro & Market Research Team. The team of 13 analysts based in Paris, Cologne, Trieste, Milan and Prague runs qualitative and quantitative analysis on macroeconomic and financial issues.
The team translates macro and quant views into investment ideas that feed into the investment process.