According to analysts at Wells Fargo, the next few months will be key to the global growth outlook, with the 31 Brexit deadline and multiple possible US tariff increases to Chinese goods.
Key Quotes:
“The global economy remains under pressure, with 2019 real GDP growth looking increasingly like it will be the slowest since 2009. The weakness continues to be concentrated in the manufacturing sector as the escalation in the trade dispute between the United States and China works its way through global supply chains. The Eurozone manufacturing PMI is near lows not seen since the depths of the 2011-2012 European sovereign debt crisis, while industrial production growth in China is at its lowest point in nearly 20 years. While the service sector in most large economies continues to expand, it too has begun to feel the pain recently.”
“The fiscal policy response in developed economies has been minimal, leaving central banks to do the heavy lifting. The European Central Bank (ECB) cut rates in September and restarted its quantitative easing program, while several emerging market central banks like the Bank of Mexico and the Reserve Bank of India continued to cut rates in an effort to spur faster economic growth.”
“The next few months will be key to the outlook, with an October 31 Brexit deadline and multiple possible U.S. tariff increases looming between now and the end of the year. Against that backdrop, we expect most central banks to remain in easing mode to support their economies. Brexit and trade uncertainty appear likely to remain major issues in 2020, however, and as a result we think global economic growth will likely remain relatively slow through at least the first half of next year.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD edges lower toward 1.0700 post-US PCE
EUR/USD stays under modest bearish pressure but manages to hold above 1.0700 in the American session on Friday. The US Dollar (USD) gathers strength against its rivals after the stronger-than-forecast PCE inflation data, not allowing the pair to gain traction.
GBP/USD retreats to 1.2500 on renewed USD strength
GBP/USD lost its traction and turned negative on the day near 1.2500. Following the stronger-than-expected PCE inflation readings from the US, the USD stays resilient and makes it difficult for the pair to gather recovery momentum.
Gold struggles to hold above $2,350 following US inflation
Gold turned south and declined toward $2,340, erasing a large portion of its daily gains, as the USD benefited from PCE inflation data. The benchmark 10-year US yield, however, stays in negative territory and helps XAU/USD limit its losses.
Bitcoin Weekly Forecast: BTC’s next breakout could propel it to $80,000 Premium
Bitcoin’s recent price consolidation could be nearing its end as technical indicators and on-chain metrics suggest a potential upward breakout. However, this move would not be straightforward and could punish impatient investors.
Week ahead – Hawkish risk as Fed and NFP on tap, Eurozone data eyed too
Fed meets on Wednesday as US inflation stays elevated. Will Friday’s jobs report bring relief or more angst for the markets? Eurozone flash GDP and CPI numbers in focus for the Euro.