The closing months of 2018 and the early months of this year
have seen a sharp slowdown in economic activity in the world,
particularly marked in Europe and in East Asia. This exceeded
expectations and has strengthened fears of a coming recession. Yet,
as was argued in the last quarterly note, these fears still seem
excessive and while growth forecasts have been downgraded for 2019,
a recession will hopefully be avoided both this year and next.
After all, some of the clouds that darkened the financial picture
last year, particularly for emerging markets, have lifted (e.g.
dollar strength, higher U.S. interest rates, fears of inflation
surging). And some of the Eurozone's weakness was generated by
temporary effects (e.g. gilets jaunes demonstrations in France, new
car emission tests or adverse weather conditions in Germany).
