Brexit still weighs on GBP, but the situation on rates and equity could normalise
Friday 13 December 2019
After enjoying stellar performance this year, investors will increasingly question whether the global economy will proceed towards a trade war-engineered recession moving into 2020, thereby ending the longest ever bull market. Or, if growth stabilises at a low level, and potentially rebounds, the cycle could extend even further.
In Amundi’s view, the retreat in global trade is a major change to the structure of growth but will not lead to a full-blown recession, especially at a time when cumulative loose policies will gear up and a partial deal between US and China is in sight.
Video - Part 1 (only available in Chinese version)
Monetary and fiscal combination, a theme that will become prominent next year and beyond, may extend the cycle further, and may as well strengthen the resilient domestic demand. While the noise on trade-related issues will be high, a material escalation, which could damage the US economy, is unlikely, given the upcoming US elections in 2020.
New themes will emerge in Emerging Markets from a more fragmented world and a retreat in global trade. Investors will have to go beyond the traditional “global” EM concept and dig deeper to capture attractive opportunities and themes.
Video - Part 2 (only available in Chinese version)