- Global Macro - Outlook to 2020
Global Macro - Outlook to 2020
Wednesday 28 November 2018
Research / Market
In the world economy, 2018 began based on the theme of a synchronised global recovery. But, this did not last. Since the spring, the protectionist measures taken by Donald Trump have changed the game. Emerging economies, some of which are heavily indebted in dollars, have been weakened due to the broadbased appreciation of the US currency. The depreciation of their currencies has generated local inflation and led their central banks to tighten monetary policies, which has weighed on economies already negatively affected by massive capital outflows. Advanced economies have begun to slow down. In our view, the year will end with a global economy that is evolving in a disjointed fashion, with increased downside risks.
US-China trade: continuing the talks while making the war
In our opinion, we should dismiss the idea that talks could breakdown, albeit uncertainties remain. On one side, in order to reach an agreement China wants the U.S. to remove all extra tariffs, set targets for Chinese purchases of goods in line with real demand, and ensure that the text of the deal is “balanced” to ensure the “dignity” of both nations.
Economic crisis and political risk batter Argentina. Way out or opportunity?
Argentina’s economic situation: The economy is facing severe stagflation. Monetary and fiscal policy are extremely tight, consumer and investor confidence is low, and inflation is proving very sticky amidst wage indexation.
Asset Class Return Forecasts - Q2 - 2019
Our medium-term baseline scenario is that of a late business cycle slowdown followed by a probable mild economic recession in the next three to five years.