Cross Asset Investment Strategy - October 2019

Monday 07 October 2019

Research / Market

Cross Asset Investment Strategy -  October 2019 

Find the latest edition of the monthly publication of our Research Team.

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Vignette 600x400 China growth
06/11/2019 Research / Market

China’s growth tremors: risks, opportunities and the road ahead

Soft landing and light policy support. In terms of Chinese growth, we see the rate continuing to slow. Chinese GDP growth rose 6.0% in the third quarter of 2019 (Chinese authorities forecasted a range of 6.0%-6.5% YoY), the slowest pace since the early 1990s. Moving into 2020, we do expect that the new growth target will be set around 6.0%, if not lower, at between 5.5% and 6.0%, and our current forecast is confirmed at 5.8% YoY. Exports unsurprisingly have been weak, private capex has slowed notably, and public infrastructure has not picked up as expected. Going forward, we expect public infrastructure capex to accelerate, and the tight real estate policy stance to potentially moderate. Chinese policy mix remains stimulative, though in a very limited way so far and far away from the massive stimulus implemented in recent years.

Vignette-600x400 High Yield
06/11/2019 Research / Market

High Yield: deep diving needed due to a more uncertain outlook

Global growth has been slowing since 2018, due to a combination of factors, including trade wars – with consequently slower global trade -- past US Fed tightening, and rising geopolitical risks. This slowdown has become more pronounced in the last couple of quarters, especially in the most open economies, such as Europe and some EM, while the US economy has remained relatively more resilient despite losing momentum.

2019.08.05 - Emerging markets
30/10/2019 Research / Market

Emerging Markets Charts & Views - A tug of war between weaker growth and looser policies

Emerging economies have faced a backlash in the last few months as a consequence of the global economic weakness and the uncertainty related to global trade. This weighed on the performance of EM equities in the third quarter, although they recovered somewhat in September. EM debt proved more resilient, supported by investors’ appetite for yield. Idiosyncratic events (Argentina, Saudi Arabia and Turkey, to name a few) also impacted the overall more fragile environment for EM. As a consequence, we have revised down our EM GDP growth forecast to 4.2% in 2019 and 4.4% in 2020, from 4.3% and 4.5%, respectively, with significant country divergences.