“The difficulty lies not so much in developing new ideas as in escaping from old ones.”
John Maynard Keynes
Macro Environment
- Inflation is edging higher in developed markets
- Trump victory increases uncertainty domestically as well as globally
- Growth in China remains robust while Europe seems to recover, US growth stable
- Political and economic risks remain at the forefront in the Euro area (elections, Italian banks, Greece, etc.)
- Hard Brexit highly likely
Outlook and Markets
- Equity market’s one way bet on Trump’s “all growth pushing” policy choices will be tested
- Increased volatility across asset classes and regions ahead with the new US administration still lacking any coherent policy
- BoE and ECB on hold for the time being, Fed is preparing 2-3 rate hikes in the coming quarters
- Productivity growth continues to be located in emerging markets rather than in developed economies
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