How does UK economy change under AI? UK political risks.
Francine Lacqua
Bruno Skarica
UK has declining payrolls but economy growing - cyclical productivity upswing. Question is how much is cyclical vs structural from AI investment.
Expectations from Bank of England?
Francine Lacqua
Bruno Skarica
Not expecting action today. Focus on vote split and forward guidance. Market pricing probably undershoots what could happen if inflation comes down in Q2.
How does BOE deal with political risk of Labour government?
Francine Lacqua
Bruno Skarica
BOE should focus on economy. Politics might impact longer end of gilt market more than front end.
How does UK economy grow?
Francine Lacqua
Bruno Skarica
Externally-oriented sectors (finance, tech) picking up steam faster than consumer-facing sectors. Global growth lifts all boats.
ECB outlook - hike next move?
Francine Lacqua
Bruno Skarica
Take other side - if inflation undershoots target, could be rate cut discussion. Base case is hold but don't see hiking environment this year.
China import deflation dynamics?
Francine Lacqua
Bruno Skarica
Disinflationary measures coming into Europe from China trade diversion.
What do you like in fixed income?
Francine Lacqua
Bruno Skarica
Still a carry environment with low rate volatility. Corporate credit should be great. Local emerging markets interesting with positive story.
Treasuries?
Francine Lacqua
Bruno Skarica
In a range, getting closer to upper end where you want to look at options to buy.