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MACRO RESEARCH
September 2019

Global View – Q4 2019


Foreword
GlobalView
The escalation in the trade war is likely to weigh on corporate investment. While the risk of a global recession has clearly risen, we still expect the expansion to persist in the foreseeable future. The pace of manufacturing activity should trough soon, with additional monetary and fiscal stimulus supporting activity going into next year. Still, any recovery in manufacturing is likely to be more shallow and protracted than we previously anticipated. We expect the Yen and Swiss Franc to do well as the real rate differentials and their respective safe-haven status will be appealing to investors. We expect bond yields to trough in the coming months, but anticipate only a modest recovery. Deteriorating liquidity conditions combined with often too elevated earnings expectations for 2020 call for a more defensive equity positioning in coming months.

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