Delivering Global Macro Investment Insights

DeSaque Macro Research

DeSaque Macro Research Limited was formed by Said DeSaque in April 2012 with the view to delivering global macro investment insights aimed at providing new ideas to clients.

Said DeSaque has over 26 years of experience working as a professional economist in financial services. Prior to establishing DeSaque Macro Research, Said held positions as Senior Economist at Robert W Baird and William Blair. He began his career as a graduate at PaineWebber in 1986, where he eventually became Head of the London Economics Department.

Said takes a very keen interest in international relations, along with their implications for economic development. His research interests include the economic transformation of China and its implications for global capital markets, particularly in the United States. He is a member of Chatham House in London.

The US economy and capital markets have historically been Said’s main focus of attention. He frequently presents his views to institutional investors in diverse geographic locations. In recent years, Said has also been carefully monitoring economic developments in Asia, particularly China and Japan.

Floods/ Fertility/ Prosperity/ Enmity/ Walls

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Global Economist, DeSaque Macro Research

Said Desaque

Global Economist

Macroeconomics

The economic recovery in China is being hamstrung by efforts to quell outbreaks of the Delta variant of the COVID-19 virus, while Chinese vaccine efficacy against the strain is unknown due to the lack of data. Notably, the commercially important province of Guangdong has been impacted by the Delta variant and has prompted calls for supportive policy measures to be undertaken to support the economy.
The People's Bank of China (PBoC) has recently reduced the required reserve ratio (RRR) for banks, but it is unclear whether lending standards to small and medium-sized businesses will be significantly eased. Reducing the RRR has not been viewed as a harbinger for wider credit easing via lower interest rates, but the PBoC and the Fed could eventually be heading in different policy directions.
Fluctuations in the yuan-dollar exchange rate have been associated with shifts in US financial conditions, notably dollar appreciation has been synonymous with lower degrees of financial accommodation. Private capital outflows from China are repressed via taxation and, consequently, national economic interests play the dominant role in determining the size of Chinese monetary spillovers into US financial markets.
The US currency appears to have bottomed in early-June, but the Fed's response to rising inflationary expectations could be critical for the dollar, as well as offering potentially China some assistance via a weaker yuan. Historically, the starting point of dollar appreciation versus the yuan, particularly when trading above 6.7, has had a major influence on its impact on US financial conditions, thereby suggesting that trading current levels offer the Fed a limited buffer zone.

The economic recovery in China is being hamstrung by efforts to quell outbreaks of the Delta variant of the COVID-19 virus, while Chinese vaccine efficacy against the strain is unknown due to the lack of data. Notably, the commercially important province of Guangdong has been impacted by the Delta variant and has prompted calls for supportive policy measures to be undertaken to support the economy.
The People's Bank of China (PBoC) has recently reduced the required reserve ratio (RRR) for banks, but it is unclear whether lending standards to small and medium-sized businesses will be significantly eased. Reducing the RRR has not been viewed as a harbinger for wider credit easing via lower interest rates, but the PBoC and the Fed could eventually be heading in different policy directions.
Fluctuations in the yuan-dollar exchange rate have been associated with shifts in US financial conditions, notably dollar appreciation has been synonymous with lower degrees of financial accommodation. Private capital outflows from China are repressed via taxation and, consequently, national economic interests play the dominant role in determining the size of Chinese monetary spillovers into US financial markets.
The US currency appears to have bottomed in early-June, but the Fed's response to rising inflationary expectations could be critical for the dollar, as well as offering potentially China some assistance via a weaker yuan. Historically, the starting point of dollar appreciation versus the yuan, particularly when trading above 6.7, has had a major influence on its impact on US financial conditions, thereby suggesting that trading current levels offer the Fed a limited buffer zone.   

China Growth Outlook: Facing Headwinds, While Exchange Rate Relief Depends on Fed Policy Changes