While these objectives are laudable, there are methodological obstacles. The initial objectives of Solvency II were harmonization, financial stability and policyholder protection. The text had therefore been conceived as a risk-based regulation, based on the valuation of the balance sheet on a mark-to-market basis and on capital requirements calibrated using Value at Risk (VaR) with a confidence level of 99.5%.

March was a clement month for investors, with most asset classes delivering a positive performance.

In our opinion, it is time to add cyclicity to the portfolio to benefit from an improving environment.

Global stock markets ended Q1 at an all-time high, fuelled by continued investor optimism. The resilience of the global economy, particularly in the US, has pleasantly surprised many.

Markets held up well during March, supported by robust economic indicators coming from the US, manufacturing and services PMIs improving in China and an increasingly dovish stance from the ECB.

High yield markets are shrinking. Do you know that they have contracted by 25% over the past two years? The ICE BofA BB-B Global High Yield Index has lost $654 million in value. In the meanwhile, investor demand for credit and high yield has rebounded at the end of last year.

On April 13, Iran decided to strike Israel with 300 drones and missiles following an attack on its diplomatic compound in Syria. Regional escalation and oil price are at risk. This tail risk cannot be ignored. We are closely monitoring the unfolding situation.

Preliminary number of US building permits, existing home sales, and mortgage applications will be published, shedding some light on the strength of the real estate market. Final inflation readings for March, PPI and CPI in Europe, Canada and Japan will complete a picture of price trends while the US, UK and China’s retail sales will likely confirm a further expansion. The US Federal reserve bank’s Beige Book will be released and the IMF World bank will gather for its Spring Meeting. Its managing director already warned against the height of debt and depleted fiscal buffers. Netflix, Procter & Gamble, Johnson & Johnson and American Express will release their Q1 2024 financial results as we get into the thick of the season.