The Q3 19 Global Outlook from Barclays Research explains why the recent bond rally does not signal a dire economic outlook and highlights that the US economy and its financial markets, supported by central banks ready to pre-emptively offset economic risks, will likely continue to support global economic growth.
Watch a four-minute video discussion of Global Outlook: Monetary tide keeps markets afloat with Ajay Rajadhyaksha, Head of Macro Research.
We do not fully subscribe to the view that equities are simply at wrong levels and will weaken as they start to reflect weakening economic fundamentals. Instead, we feel that the bond rally is largely explained by investors recalibrating sharply lower than what they believe is the neutral policy rate in the US and Europe.Ajay Rajadhyaksha, Barclays Head of Macro Research
The latest Global Outlook highlights several macro themes, including:
- The catalysts behind the rally in bond and stock markets
- The role that central banks play in supporting global economic growth
- The risks of a global trade war and recession
The Q3 Global Outlook recommends an overweight allocation to global equities over fixed income, with a preference for US stocks with low international sales, which are less likely to be negatively impacted by trade headlines.
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GLOBAL OUTLOOK
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About the analyst
Ajay Rajadhyaksha is Head of Macro Research at Barclays, based in New York. He oversees the global research and strategy efforts of the economics, rates, FX, commodities, emerging markets, securitised, and asset allocation teams. Since joining Barclays in 2005, Mr. Rajadhyaksha has held various positions, including Co-Head of FICC Research and before that, Head of US Fixed Income Research and US and European Securitised Research.
Read the full report
Barclays’ Global Outlook, published quarterly, provides an assessment of all major economies and markets and outlines recommendations for investors. Global Outlook: Monetary tide keeps markets afloat is now available to Investment Bank clients on Barclays Live or on the Barclays Live app.