Stay nimble, flexible in late cycle rebound
The maturity of the cycle, residual geopolitical risks and some crowded positions across asset classes raise the prospect of intermittent bouts of headline and intra-market volatility in 2020.
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THE global economy stands at an important late cycle inflection point. But late cycle does not mean end cycle. We continue to view short-term recession fears as overdone.
Rather, we expect a moderate growth reacceleration in early 2020 as geopolitical risks abate, China's growth slowdown stabilises and as the lagged impact of looser monetary policy globally feeds through to demand.
Lower USD borrowing costs also herald an important easing of financial conditions to emerging markets that is likely to be positive for global demand growth. The global demand slowdown in 2019 has been largely driven by global industrial production and trade as the negative impacts of the US-China trade dispute have increased.
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