Return to Normal The information presented in this publication is provided purely for informational purposes and does not constitute investment advice, a sales offer, or a solicitation to purchase, and should not be considered as an incentive to engage in any investment. The macro point Back to NormalMacro BriefAll signals are green. On the pandemic front, good news keeps coming. Last week, for the first time since March 2020, the UK experienced its first day without a Covid-related death. In continental Europe, the process of returning to normal continues. Since last Friday, the requirement to present an antigen or PCR test to dine or go to shops in Berlin has been lifted. From Wednesday, schools are set to reopen at full capacity in the German capital. In France, gyms will be able to reopen their doors again starting this week. In Southern Europe, all necessary measures to welcome tourists and partially save the summer season are being put in place. Across developed countries, the pandemic is being contained thanks to an unprecedented acceleration in vaccination over the past few weeks. As we continually stated at the beginning of the year, the best economic stimulus is vaccination. We are seeing proof of this today. The economy is picking up everywhere. In Greece, the manufacturing PMI is now at its highest level since 2000. A similar trend is observed across all European countries. Retail sales have also surged everywhere. In April, online sales in Germany were 50% above their pre-crisis level (which is also explained by a change in consumer habits). We can finally dare to say that the page on the health crisis is almost turned. Even financial markets are thriving, with the CAC 40 index in Paris surpassing 6500 points and showing an increase of nearly 17% since the start of the year. The only downside remains inflation - which is a concern for some economists. However, in the eurozone, the risk of a lasting surge in inflation is unlikely. In May, according to figures released last week, the consumer price index (CPI) reached 2% year-on-year - its highest level since the end of 2018. This level is also above the ECB's target ('close but below 2%'). But, when looking in detail, last month's increase is mainly explained by the rebound in oil prices over a year (known as the base effect - which contributed to an estimated 125 basis point increase in the CPI). Everything suggests that inflation has peaked and will decline in the coming months. Therefore, there are no clouds on the horizon that could genuinely stall the ongoing economic recovery. Technical point The only caveat remains inflation – which is a concern for some economists. However, in the eurozone, the risk of a sustained surge in inflation is unlikely. In May, according to figures released last week, the Consumer Price Index (CPI) reached 2% year-on-year – its highest level since late 2018. This level is also above the ECB's target (“close to but below 2%”). But when looking in detail, the increase observed last month is mainly explained by the rebound in oil prices over a year (known as the base effect – contributing to an estimated 125 basis point increase in the CPI). Everything suggests that inflation has peaked and will decline in the coming months. There are thus no clouds on the horizon that could severely hinder the ongoing economic recovery. Announcements to follow In the forex market, volatility remains particularly low. Major technical levels (supports and resistances) for many currency pairs are unchanged from last week. Notably, EUR/GBP, EUR/CHF, and EUR/JPY. We remain in a market configuration marked by low fluctuation ranges. Regarding EUR/USD, volatility was also low in recent sessions despite busy U.S. news (especially at the employment level). The underlying upward trend, which began in early April, remains ongoing but the pair clearly lacks catalysts to break above the resistance at 1.2302. The market is still very cautious for EUR/USD.