Monthly Global Economic & Market Monitor (Monday, February 01, 2016)

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Eurobank monthly janfeb2016Monthly Global Economic & Market Monitor (Monday, February 01, 2016)

Viewers can read the preamble and at the end the entire report in the link that follows:

  • Global growth is expected to move broadly sideways, hovering around 3.3% in 2016 from 3.1% in 2015, the slowest pace in the post-crisis period. Growth in advanced economies will probably accelerate on resilient domestic demand, while EM growth is likely to pick up slightly on shallower recessions in Brazil and Russia and higher GDP growth rate in India.
  • In the US, we expect sub-par rates of growth over the next couple of years (~2.5%). The EA economy seems resilient to global slowdown on low oil prices, a weaker EUR and easier ECB monetary policy. In Japan, stronger private consumption, together with a modest rise in investment, should help to offset a slowdown in Japanese exports to emerging Asia.
  • Risks:
  • Chinese economy slowdown: Soft or Hard landing? Is China headed to a financial crisis? Lack of transparency of Chinese macro data and policymaking makes international financial markets shaky.
  • Commodities & Oil prices collapse: Is it a zero sum game for global growth? Gains for net importers (Developed) vs. Losses for net exporters
  • (Russia, Brazil). Negative spillovers for world trade.
  • Divergent monetary policies of the major central banks:
  • Capital outflows from EMs
  • Pace of Fed’s tightening in 2016 & BoE to follow?
  • Is more QE from ECB and BoJ likely?
  • PBoC accommodative stance to become more aggressive?
  • Implications: More pressure on those with high level of dollarization: Turkey & Ukraine.
  • (Geo) political risks around the globe
  • European politics: BREXIT Debate & EU-Russia relations, EU election calendar ahead (Spanish re-elections? Portugal, Austria, France & Germany run up in 2017).
  • Middle East: Refugees crisis vs. ISIS terrorism attacks & Saudi-Iran escalation.
  • Russia-Ukraine conflict & Korean peninsula arms race….

Eurobank Monthly Global Economic Market Monitor January – February 2016…

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