G E ORG E V A S S E T M A N A G E M EN T
2014 April 2nrd
MANAGEMENT VIEW
As expected, the turmoil in Ukraine did not impact the financial markets. They depend more on the economic environment: growth in the US or deflation risk in Europe. The deflation risk, although that is not our scenario, should not be ignored: rate decrease on one hand but on the other hand prices and wages pressured by the globalization. The market behavior comfort us concerning the economic recovery, moreover the results of municipal elections opens a window of opportunity in France. It seems that the President has understood that the only way to reduce the imbalances is to support the economic recovery. But he will have to preserve the fiscal gains that will be generated. The Commission of Brussels will not face France in an institutional crisis. Germany would be directly impacted. Mr Valls will have to find the right arguments in order to convince Brussels: markets will judge the result.
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