Frederik Ducrozet

Head of Strategy & Macro Research, Pictet Wealth Management @PictetGroup.
ECB Watcher. All opinions mine.

[Frederik Ducrozet @fwred]

Central banks: from whatever it takes to whatever it breaks.

[Greg Ip @greg_ip]

Scott Bessent, at his confirmation hearing in Jan/2025 to be Treasury Secretary: "the tragedy going on in Ukraine is one of the greatest tragedies of my adult life ... I believe that the sanctions [on Russia] were not fulsome enough. I believe that the previous administration was worried about raising US energy prices during an election season... if I'm confirmed and if President Trump requests ...I will be 100% on board for taking sanctions up."
Mark Warner (D-VA): "I very much appreciate your willingness and I hope you will be an advocate for keeping those sanctions on and actually advancing them even further."
https://t.co/kceZaeZdKf

[Joe Weisenthal @TheStalwart]

Expired: AI will take your job.

Tired: A human working with AI will take your job.

Wired: A human working with an unreleased model at an AI company will take your job.

[Frederik Ducrozet @fwred]

@Alea_ @IyerC You got me wrong, I think they shouldn’t, and hope they won’t have to.

[Frederik Ducrozet @fwred]

The very first step of verbal intervention - repeating that all instruments are available.

[*Walter Bloomberg @DeItaone]

*LAGARDE: ECB HAS TOOLS TO COUNTER UNWARRANTED MARKET DYNAMICS

[Frederik Ducrozet @fwred]

🇺🇸 US AI imports have *doubled* in just one year, from roughly $500bn to over $1,000bn annualised.
In August, AI related goods imports represented 27% of total imports (up from 10% in the last decade), or 3.3% of GDP (up from 1.3%).

[Luis Garicano 🇪🇺🇺🇦 @lugaricano]

Stirrings of a sovereign -bank loop?
France's banks are very large, 3 times French GDP. In August, insuring their debt via CDS cost the same as German banks. Why, if the banks hold few (4% of assets) bonds? The link is the state guarantee: we still don't have European deposit insurance!

[Frederik Ducrozet @fwred]

https://t.co/uYYQNFGhH8

[Frederik Ducrozet @fwred]

🇫🇷 French budget execution remained broadly stable through August (€159.6bn deficit vs €157.5bn in 2025). Fiscal revenues rose €6.4bn but spending rose €13bn (interest burden, defense, energy). This year's revised deficit target may be achieved, but the hard part lies ahead.

[Frederik Ducrozet @fwred]

@jeuasommenulle My guess would be north of 250bp, unless we're looking at a liquidity crisis before that.

[Frederik Ducrozet @fwred]

We’ve not reached the stage yet where Le Spread make all the headlines of the French media though. Nothing like Lo Spread in Italy back in the days.
And no, the ECB is not going to step in at these levels.
Closer to the beginning than the beginning of any kind of resolution.

[JohannesBorgen @jeuasommenulle]

We've reached the stage where the answer to "Why is Le Spread up?" is "Because today is after yesterday"

[Frederik Ducrozet @fwred]

🇪🇺 No good news on the European inflation front, and the longer it lasts, the worse it gets.
But at least core inflation was in line with ECB staff projections.

[Frederik Ducrozet @fwred]

🇺🇸 As a result of the soft PCE and the revisions, the Inflation Shock Momentum Index based on the San Francisco Fed model improved significantly through August.

[Frederik Ducrozet @fwred]

The AFT estimates that borrowing needs will rise to a record €340bn in 2027 (up €28bn from 2026), against the backdrop of a 5% deficit, rising interest burden (€73bn, up €10bn) and larger redemptions (€190bn, up €19bn). https://t.co/8iEzNvkRwV

[Frederik Ducrozet @fwred]

🇫🇷 Le Spread enters a new regime as the rates sell-off hits the weakest links.
OATs facing a perfect storm of political radicalization, shifting opinion polls, weak growth, large deficits and borrowing needs (which the Treasury estimates will rise by €28bn in 2027, to €340bn).

[Frederik Ducrozet @fwred]

Betting against the House? Shocking.

[Frederik Ducrozet @fwred]

🇪🇺 Euro area PMIs defying oil and political gravity, partly driven by rising AI and defence spending. Yes, inflationary pressures are rising again, but PMI gauges look contained and risks of second-round effects remain limited.

[Dario Perkins @darioperkins]

Ok thats terrifying

[Omair Sharif @fcastofthemonth]

Interesting that the SEP seemingly did not incorporate the BEA's revisions, but Warsh noted that core PCE looks like it will be 3.2%. Under the old methodology, it was tracking at 3.4% in Aug, so seems like the Board staff's est of the BEA's revisions is about -20bps.

[Frederik Ducrozet @fwred]

Guess Waller’s 3m3m core PCE threshold wasn’t a threshold after all.

[Frederik Ducrozet @fwred]

Fed hikes 25bp unanimously.

Median dot plot shows one more hike this year.

« Congratulations Chair Warsh, you’re a real central banker now. »