Global Macro Service > Global Macro Themes And Asset Views Chartbooks

Global Macro Themes and asset views chartbook, December 2018

In our global macro chartbook for December, we summarise our views on current global themes and asset markets, and link to our research highlights over the last month.

This month, we report that while the global economy has ended the year on a soft note, we expect the expansion to regain a bit of momentum in 2019 and attach only a 25% probability to a global recession. We highlight our research on the macro impact of October’s market reversals and examine the latest developments of the US-China trade war. We report that the recent flattening of the yield curve has not led us to revise up the risk of a global recession from 25%. And we explain why central bank hawks are unlikely to gain the ascendancy, as only a slow pace of normalisation is justified at present.

We also mention that cyclical risks such as diminished slack as well as high and declining debt quality have raised recession vulnerabilities. We believe concerns that warrant attention and could prove to be game-changers for the 2019 outlook are trade wars, central bank induced liquidity shocks, a rise in macro volatility from current historical lows and the impact of policy transmission in China.

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