Update III/2019

Capital market implications 2019/2020

Kapitalmarkt-Implikationen 2019/2020


Our capital market implications give you a brief summary of the baseline macroeconomic scenario. In our world map of political risks, we also take a look at existing and potential hot spots.



There is still a loss of economic momentum. Regional and sectoral differentiation continues with Europe and the manufacturing sector – representing the cyclical part of the global economy – on the weak side. Ongoing labour market tightening will entail a further narrowing of the global output gap. Large swings in the terms of trade due to the rise and fall of commodity prices. Biggest risks: global trade war, a hard Brexit and rising tensions in the Near East.


Base effects of the ups and downs of raw material prices are determining CPI time profile in 2019 – and in 2020. Subdued price pressure in the EZ and Japan while US core rate is ticking up.


The Fed has shifted to an easing course due to recession fears – further cuts of the Fed funds rate in 2019. This helps EM central banks to focus on domestic issues. ECB with easier monetary policy: lower deposit rate + extended forward guidance + net asset purchase programme. The BoJ remains expansionary due to calm price climate, while BoE actions depend on the Brexit path. China’s PBoC continues to support national economic policy.


Expansionary effects of US fiscal policy are coming to an end. French budget deficit above 3% in 2019. Truce between Rome and Brussels about budget deficit, but no final solution. What is the intention of the new government? Will Germany increase fiscal deficit?

Weltkarte politischer Risiken

Weltkarte politischer Risiken

Source: AllianzGI Economics and Strategy. Data as of November 2019
The material above contains the current opinions of the author, which are subject to change without notice. Statements concerning financial market trends are based on current market conditions, which will fluctuate. Forecasts and estimates have certain inherent limitations, and are not intended to be relied upon as advice or interpreted as recommendation. See additional disclosure at the end of this presentation.


Update III/2019

An ESG framework for EM sovereign bonds

ESG-Rahmenwerk für Staatsanleihen aus Schwellenländern


The creditworthiness of an emerging market country is dependent on many factors. Typically, investors focus on a range of macroeconomic variables, such as fiscal deficits, debt levels, or the stock of foreign exchange reserves.

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