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Watch a three-minute video discussion of Global Outlook: Rational exuberance with Ajay Rajadhyaksha, Barclays Head of Macro Research

In the latest Global Outlook, Barclays Research argues that investors should remain positive on risk assets: the ongoing global economic expansion has substantial momentum, and the risk of a major growth disappointment is low, especially in the first half of 2018.

Ajay Rajadhyaksha, Barclays Head of Macro Research, discusses the outlook for Q1 2018, as outlined in a recent report, Global Outlook: Rational exuberance. Against a backdrop of unusually – and exceedingly – benign economic and monetary policy, some investors are skeptical about whether the performance of risk assets, including the year-long global equity rally, is justified.

Global Outlook’s long equities and other risk assets’ thesis is driven by three views:

  • Global growth will continue, although earnings are expected to slow from the torrid pace of recent quarters.
  • Longer rates in safe-haven fixed income will stay low along with core inflation, despite Fed balance sheet run-off.
  • The US dollar is in a medium-term downtrend, which is generally supportive for risk assets.
Our 2018 outlook is for a continuation of the ‘Goldilocks’ economic environment to which markets have become accustomed. Although the outlook for 2019 is necessarily murkier, our forecasts are similar, with growth declining toward trend and inflationary pressures well contained.
Ajay Rajadhyaksha, Barclays Head of Macro Research
About Global Outlook

Barclays’ Global Outlook, published quarterly, provides an assessment of all major economies and markets, and outlines recommendations for investors. Further views from Global Outlook: Rational exuberance are now available to Investment Bank clients on Barclays Live or on the Barclays Live App.

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GLOBAL OUTLOOK

Q4 Global Outlook

Barclays’ Research team expects equities to continue to rally in the current low-volatility macroeconomic environment and global political backdrop.

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