The big picture | Global macroeconomic and tactical asset allocation outlook

Global growth is moderating but we still expect solid demand for at least the first half of 2019. We also expect core inflation to tick higher in developed countries.

20 Nov 2018
  • The rate of acceleration in the global economy has continued to moderate and growth rates by country and region have become more differentiated and less synchronized. But we expect the overall growth rate to remain solid in 2019.
  • We see the potential for global growth drivers to at least partly resynchronize in 2019 as the Chinese growth stimulus kicks in and as the pace of growth in the US starts to fade.
  • Against this backdrop we remain positive on global equities for 2019 but accept that volatility is likely to remain higher. Our preferred markets include Japan and emerging markets.
  • We expect core inflation and government bond yields to tick higher in the developed world as output gaps close and wage growth accelerates. On a relative basis we prefer nominal US Treasuries to their German counterparts.

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