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.

[Soumaya Keynes @SoumayaKeynes]

First, the supreme court collapsed the Trump administration's tariff wall.

Then the Trump erected a temporary tariff fence, due to fall down again in late July.

Last night USTR shared how it plans to rebuild the tariff wall's foundations. ����

[Frederik Ducrozet @fwred]

I'd watch for seasonal adjustment issues in transportation, airfares, package holidays and other energy-impacted HICP items in the final releases. But a lot of the damage will be done anyway.

[Frederik Ducrozet @fwred]

🇪🇺 A very bad inflation report for the ECB, including a 50bp rise in services inflation that looks at odds with national data, way above staff projections.
Likely to be reversed, but this will keep the ECB on high alert following an all-but-certain rate hike next week.

[Javier Blas @JavierBlas]

CHART OF THE DAY: On Apr 16, the IEA made a headline-grabbing warning: Europe had "maybe 6 weeks or so of jet fuel left." It's week seven; the planes are still flying. Since those headlines, European wholesale jet fuel prices have fallen ~30% to a ~3-month low.

[Frederik Ducrozet @fwred]

AI is the economy

[Frederik Ducrozet @fwred]

Still, the growth outlook is weakening and there’s no risk of a wage-price spiral whatsoever. A bumblebee ECB should not overreact.

[Frederik Ducrozet @fwred]

🇪🇺 Olli Rehn is basically giving up to the idea that the ECB "needs to hike" to "preserve credibility". The bond market is doing part of the heavy lifting for the central bank, but it’s also forcing their hand because they worry the sell-off will worsen if they don’t hike.

[Frederik Ducrozet @fwred]

🇪🇺 French PMIs registered one of the largest drops in output and employment outside covid and the sovereign debt crisis. Inflationary pressures are rising and tighter financial conditions will only make things worse.

[Sander Tordoir @SanderTordoir]

Germany is the epicentre of the China Shock 2.0 reverberating in global markets

In a new paper, @Brad_Setser and I show the shock is a key driver of Germany’s economic malaise. And it's accelerating

Berlin needs to stop admiring the problem, and join efforts to fight back

1/

[Ernie Tedeschi @ernietedeschi]

New today on Stripe Economics: four of my favorite Sessions-related chart from this year.
Solopreneurs are multiplying. The SaaSpocalypse wasn't about current activity. And the Solow paradox suggests AI productivity gains may be ahead of us, not behind. /1
https://t.co/y71yZDuK6s

[Frederik Ducrozet @fwred]

And yes I know base effects were favourable and inflation will rise again.

[Frederik Ducrozet @fwred]

🇬🇧 If it weren't for the war, we would be debating how many cuts the BoE needs to deliver in the months ahead.

[Frederik Ducrozet @fwred]

🇬🇧 BoE hiking rates when the labour market is weakening dramatically is... not a good idea?

[Frederik Ducrozet @fwred]

Either way, Kevin is likely to receive a Warsh welcome. 🫥

[Frederik Ducrozet @fwred]

Also, we live in a different world from when Warsh was nominated. Will he still push for cuts coming into the job, or will his main challenge be to convince the FOMC *not to hike*?

[Joe Weisenthal @TheStalwart]

Meanwhile here's @fwred on Warsh

[Frederik Ducrozet @fwred]

Breaking: the Austrian Governor is NOT as hawkish as some of his ECB colleagues.
*ECB'S KOCHER: WE'RE NOT CURRENTLY CLOSE TO ADVERSE SCENARIO
*ECB'S KOCHER: JUNE IS DECISION BETWEEN HIKE AND HOLD
Markets still pricing in 21bp for June, and 75bp by year-end.

[Frederik Ducrozet @fwred]

@RobertTimper1 Fair!

[Frederik Ducrozet @fwred]

The Norges Bank becomes the third G10 central bank to hike rates in this cycle, after the BoJ and the RBA.

[Frederik Ducrozet @fwred]

🇺🇸 The NY Fed Global Supply Chain Pressure Index jumped in April to Covid-like disruption levels. https://t.co/ywfPzNS5oq

[Frederik Ducrozet @fwred]

🇪🇺 Latest update to the ECB's wage tracker has remained broadly stable around levels consistent with price stability, and showing no signs of second-round effects. https://t.co/lReQ51MJvs