The year 2017 ended with a higher growth rate than expected, due to an acceleration in the Eurozone, Japan and China, and the coming year should be equally buoyant:
- Leading indicators for the major regions are high and indicate global growth of 4% over the next few quarters, representing the highest growth rate since 2010.
- This growth appears much more synchronous than during previous years. Of the 25 main world economies, 24 are now showing growth.
- Perspectives in emerging markets are positive, regardless of the anticipated slow-down in the Chinese economy.
Inflationary pressures remain very low, whether in the Eurozone, the United States or in emerging countries. The circumstances supporting this trend will continue in 2018, but some aspects point to an acceleration:
- The rebound in commodity prices.
- The start of a wage inflation cycle, spurred by unemployment rates in the main industrialized countries that are close to their equilibrium levels.
The Fed and its new Chairman, Mr. Powell, should continue to normalize American monetary policy at a slightly faster pace than expected by the market. Inflation in the US will drive the FED’s future monetary policy.
The ECB’s asset purchases will decline quite sharply in 2018 and are expected to stop by the end of the year. Furthermore, we will monitor any change in the BoJ’s yield curve control policy.
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