With: 

Olivia Frieser,Global Head of Markets 360  

Luigi Speranza, Chief Global Economist 

Sam Lynton-Brown, Head of Global Developed Markets Strategy

BNP Paribas London Branch | Global Markets  (Recorded 2 December 2021) 

The new omicron variant is likely to be a drag on activity in the near term but does not substantially alter our positive view on the medium-term outlook for the global economy. 

The variant’s impact on inflation is more ambiguous  – on balance, we think it’s more likely to push prices up than down. 

We see a good chance that the ECB will postpone its decision on asset purchases beyond December. 

Risk assets are unlikely to rise back to their highs in the very near term, in our view, and our worst-case scenario of a major health emergency would force a change in our developed-market strategy views covering equities, rates and FX. 

That said, given the available information, we think the repricing of some markets reflects too high a probability of the worst-case, tail risk scenario unfolding. We therefore favour selectively fading recent moves. 

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