The most prominent downside global economic risks – a no-deal Brexit and a continued deterioration in US-China trade relations – have faded in recent months. The Q1 2020 Global Outlook from Barclays Research explains why our analysts have modestly adjusted growth forecasts in the US, euro area, UK and China upward heading into 2020.
Watch a four-minute video discussion of Global Outlook: A slow grind higher with Ajay Rajadhyaksha, Head of Macro Research.
We expect subdued earnings growth – 2% in the US and 5% in Europe – and returns will clearly disappoint relative to 2019 but even so, stocks should comfortably outperform core bond markets.Ajay Rajadhyaksha, Barclays Head of Macro Research
The latest Global Outlook highlights several macro themes, including:
The Global Outlook recommends being long global equities over core fixed income, with a small bias towards European equities, where there is more chance of re-rating. Our analysts are especially bullish on EM dollar fixed income and believe agency mortgage-backed securities now look attractive to investment grade.