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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
MACROECONOMIC BASE SCENARIO
1/ ECONOMIC TREND
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.
2/ PRICE DEVELOPMENT
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.
3/ MONETARY POLICY
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
4/ FISCAL 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
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.
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