A detailed analysis identifying the trends that matter, incorporating the dynamics of political risk, the business cycle and other proprietary indicators.
Contact Us for a trial.
Economics ResearchEconomics Products: Economics Monthly, Economics Weekly, Newsflow Monitor, Logistics.
Page 1: Next
• Which way will the global economy head in 2020?
• We maintain a more cautious outlook on global growth
• The economic risks to global risk assets are tilted to the downside
We consider four alternative scenarios to our central set of forecasts for 2020:
• Scenario 1: ‘Secular Stagnation’ becomes ‘Secular Stability’
• Scenario 2: The Phillips curve steepens and inflation returns
• Scenario 3: China’s private companies retrench and cut jobs
• Scenario 4: A seamless handover from monetary to fiscal stimulus
Key Message: Weakness in our Newsflow indicators is to a degree a product of weak data releases, confirmed by our Nowcasts, with which they have good relationships. Global equity outperformance vs bonds suggests markets are looking through weakness in the data at present. That weakness is widespread, seen globally, in the US and in Asia.
The global economy remains in a fragile state. We still believe a recession looks likely in 2020 for four reasons:
• A fragile truce in the trade war is unlikely to trigger a growth rebound (page 4)
• Global monetary conditions remain tight, constraining economic growth (page 9)
• Emerging markets will not provide the policy impetus to save the cycle (page 16)
• US corporate leverage means recession remains our base case (page 20)
• There are some signs of growth stabilising, but final demand remains weak
• The easing of monetary policy, so far, does not look to be sufficient
• Growth has already slowed enough for unemployment to start rising
This research report is issued by Absolute Strategy Research Ltd, which is authorised and regulated by the Financial Conduct Authority (“FCA”). Absolute Strategy Research Services Inc. is registered as an investment adviser with the US SEC, and is responsible for all communications and dealings with, and only with, US persons. The report is intended only for investors who are Eligible Counterparties or Professional Clients, as defined by MIFID and the FCA, and may not be distributed to Retail Clients.
Absolute Strategy Research Ltd does not solicit any action based upon this report, which is not to be construed as an invitation to buy or sell any security.
This report is not intended to provide personal investment advice and it does not take into account the investment objectives, financial situation and the particular needs of any particular person who may read this report.
This research report provides general information only. The information contained was obtained from sources that we believe to be reliable but we do not guarantee that it is accurate or complete, and it should not be relied upon as such. Opinions expressed are our current opinions as of the original publication date appearing on this material only and the information, including the opinions contained herein, are subject to change without notice.
This research report may not be redistributed, retransmitted or disclosed in whole or in part, without the express written permission of Absolute Strategy Research Ltd.
© Absolute Strategy Research Ltd 2016. All rights reserved.
Absolute Strategy Research Ltd. 1-2 Royal Exchange Buildings, London, EC3V 3LF. Phone: +44 (0) 20 7073 0730 Fax: +44 (0) 20 7073 0732. www.absolutestrategy.com.
Absolute Strategy Research Ltd is registered in England and Wales. Company number 5727405. Registered Office: Salisbury House, Station Road, Cambridge