Promising Factors vs Risks
According our opinion, here-with some good reasons for being optimistic:
- Global Growth Acceleration: as the IMF indicated when it recently upgraded its World Economic Outlook, growth and equity markets accelerated since summer 2016 and endured both Brexit and Trump’s election.
- Economic Climate Indicators: Data from the European Commission’s overall business climate index, which points to the phase of the business cycle, rose to 1.34 in September from 1.08 in August — its highest reading since April 2011 when it was at 1.35.
- The balance of political risks shifted from some countries to others, including GB, the US and China.
- Little change in monetary policies
On the other hand, we foresee these risks:
- There is concern by most analysts about the re-emergence of oversupply, a renewed rise in crude stocks, and how OPEC and its allies will exit from their current production deal in 2018.
- Acceleration in the normalisation of US monetary policy
- The IMF, echoed by exiting German minister Wolfgang Schäuble, warned about the debt bubble risking to explode and creating a new global crisis like the one in 2007. China is especially vulnerable to this.
- Donald Trump …
HH cons: Household consumption / Gov. Exp: Government Expenditure / GFCF: Gross Fixed Capital Formation / Net XM: Net exports
Source: ODDO BHF AM SAS. Figures as of 28 August 2017.
Source: ODDO BHF AM SAS, Thomson Reuters, Datastream, Bloomberg. Figures as of 28 August 2017.
Global CEO & Co-CIO
Deputy Head of Asset Allocation
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