Neil Dwane says the rumbling sound being heard by politicians and power-brokers at the World Economic Forum in Davos comes from a new political avalanche of populism – one that threatens to sweep away decades of pro-globalization sentiment and change the investment landscape.
As the markets close the books on another tumultuous year, investors should keep watch on the rise of populist politics, China’s re-emergence as a global growth engine and a renewed focus on government spending as interest rates remain low.
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When Donald Trump assumes office, he is expected to focus US economic policy on fiscal easing, primarily by cutting taxes for corporations and the wealthy, deregulating banks and other industries, and increasing trade barriers and immigration hurdles.
Our Capital Markets and Thematic Research team says geopolitics, monetary policy and the global economy are the three factors that will exert the most influence on investments in 2017, but it could be a volatile mix.
We expect the ECB to extend its asset-purchase program, buying EUR 80 million in bonds each month, because of concerns about low inflation and political volatility. But Trump could be a wild card in the bank’s plans for continued accommodation.
Franck Dixmier |07/12/2016
Tough-Talking Trump Has Asia on Edge
During his campaign, Donald Trump favoured a restrictive trade stance that could hurt export-reliant countries in Asia – particularly China. But with continued rebalancing and a renewed regional focus, China’s influence in Asia could grow even bigger.
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