At a time when the global economy is facing major challenges, Christophe Barraud, one of the world's leading forecasters and Director of Market Securities Monaco, has become a key reference for institutional investors. In this exclusive Monaco For Finance interview, he shares his perspectives on current economic dynamics, the strategy for establishing Market Securities in Monaco and his key forecasts for the years ahead.
You have a unique background in macroeconomics and you head up Market Securities Monaco. Can you tell us about your role and your vision for the company?
Of course. I've been chief economist and strategist at Market Securities since 2011, and last November I took over as head of the Monaco office. My role is to anticipate global economic trends and provide accurate strategic analysis. Market Securities is an international brokerage group with expertise in economic analysis for institutional clients. Our model is based on a global vision but with a local touch, in this case Monaco, which is a strategic location for financial services.
My ambition is to strengthen our economic research offering to bring added value to our clients, be they banks, pension funds or insurance companies. Here in Monaco, we offer investors direct access to our analyses, and the proximity of our offices facilitates exchanges. It's also a place where financial institutions' need for specialist advice is high, which fully justifies our presence.
You're renowned for the relevance of your economic forecasts. What is your methodology, and how does it differ from that of your competitors?
My approach is based on the analysis of diversified data and on strategic partnerships. For my forecasts, I rely not only on public economic data but also on alternative sources, in particular satellite data, which can be used to track indicators such as traffic in the car parks of major retailers in the United States to estimate consumption. This method gives me a real-time view that is often more detailed than that of my competitors.
In addition, I have developed partnerships with specialist consultancies, giving me access to exclusive data, for example in the hotel and transport sectors. These partnerships are essential, because raw data is not always enough. My role is to interpret this data by incorporating factors such as seasonality, climatic effects and the geopolitical context. This approach has given us an edge in terms of forecasting, which has become a valuable asset for our customers.
Speaking of the geopolitical context, the recent US election has raised questions. What economic impact do you anticipate?
The election has created a great deal of uncertainty, and the repercussions will be felt in a number of areas. In the short term, tax measures and economic incentives are expected in the United States, which should stimulate growth. However, the actual implementation of these measures will depend on budgetary room for manoeuvre and political majorities. Internationally, trade relations with partners such as China and Mexico are likely to be at the heart of the debate, with a possible return to protectionist measures. Such a dynamic could weigh on world trade and lead to imported inflation, which will be crucial for investors.
I believe that the new US administration will first seek to support domestic expansion and then take action on the international stage, particularly with China. The consequences for Europe could be significant, especially if the United States steps up its tariff policy. Given that the eurozone's economic dynamic is still fragile, with growth of close to 1%, it could find itself vulnerable in a context of heightened competition.
You mentioned Europe. How do you see European markets developing over the coming months?
Europe is facing major structural challenges, with weak growth and still relatively high inflation in the services sector. Unlike the United States and China, Europe seems less willing to use fiscal levers to stimulate its economy. This raises the question of its long-term competitiveness, particularly in a ‘race’ where the United States and China are investing massively.
If the European Union does not find innovative solutions to stimulate growth, it risks losing its economic attractiveness. Countries such as France, Germany and potentially Spain will have to face up to pressing political challenges. For investors, this means increased caution in certain European sectors and a possible reallocation of capital to more dynamic markets.
China is another key player in the economic panorama. What are your forecasts for 2025?
The situation in China is complex. The country is facing a property crisis that is affecting domestic consumption, with a negative wealth effect that is weighing on household confidence. In the short term, the Chinese government has introduced support measures to try to stabilise the market. However, for 2025, I expect even more ambitious fiscal measures, somewhat in the spirit of ‘whatever it takes’, to stimulate domestic consumption and attract more foreign investment.
China has a dual objective: to maintain economic stability while remaining competitive with other Asian countries and the United States. If the US lowers its tax rates to encourage local production, other Asian countries could follow suit to remain competitive, which could affect China's position in the global value chain.
How are the markets reacting to climate issues, particularly with the return of policies favouring fossil fuels, supported by D. Trump?
Energy policies are more strategic than ever for investors. Climate-friendly stocks have fallen with the resurgence of fossil fuels, but demand for renewable energy technologies remains strong. We are likely to see a reorganisation of energy priorities, with a sustained focus on certain technologies, such as electricity.
The return of fossil fuels could lead to a slowdown in the energy transition, but there is a real need for sustainable solutions, particularly in energy-intensive sectors. There is still pressure from investors to maintain green initiatives, and we are seeing growing interest in companies offering energy efficiency solutions. Despite signs of a return to traditional energy sources, the global economy needs to diversify its sources to meet future needs.
As Director of Market Securities Monaco, what are the advantages of setting up in the Principality for a brokerage firm like yours?
Monaco is a centre of excellence for financial services, and our presence here meets a real demand from institutional clients for high-quality economic analysis. Being based in Monaco gives us direct access to our clients and enables us to offer them a responsive and personalised service. The Principality is a great place to do business, and we have a dense network of contacts, which makes it easier to work together and raises our profile.
For Market Securities, this location is an opportunity to expand our client base while offering tailored support to both local and international clients. We have specialist brokers who know the Monegasque market well, and this gives us an advantage in terms of access and responsiveness, which is essential in the world of institutional brokerage.
To conclude, what are the major trends to watch over the next few years?
Geopolitical issues, tax policies and the energy transition are the major challenges of the next few years. Institutional investors will have to navigate in an environment marked by increasingly short economic cycles and rapid geopolitical changes. I believe we will also see a shift in inflation management, with significant impacts on interest rates and monetary policies.
The economic world is entering an era where uncertainty has become the norm. However, for those who can anticipate these changes, there will be enormous opportunities. This is our mission at Market Securities Monaco: to provide our clients with the keys to understanding and taking advantage of these economic developments.
(https://www.christophe-barraud.com/)
Photo credit: LOIC BISOLI
