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
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