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Economic and policy fundamentals have mainly surprised to the downside in recent months. The Q4 2019 Global Outlook from Barclays Research explains why an anticipated soft patch in economic activity in the coming quarters may weigh on sentiment toward growth-sensitive assets.

Watch a four-minute video discussion of Global Outlook: Time to play defense with Ajay Rajadhyaksha, Head of Macro Research.

We expect a growth slowdown, but not a US or global recession, given healthy labour markets and consumption, as well as further easing from most central banks. And if our lackluster economic baseline worsens into a stronger drop in economic activity, market focus could shift to the limits on monetary policy and the slim prospects for new fiscal stimulus.
Ajay Rajadhyaksha, Barclays Head of Macro Research

The latest Global Outlook highlights several macro themes, including:

  • The effect of trade and manufacturing declines in several major economies.
  • Reasonable paths for US interest rates over the next few quarters after the bond rally of 2019.
  • The downside risks of a possible no-deal Brexit, escalation of US-China trade tensions and a recession.

The Global Outlook turns towards a more defensive posture and recommends an overweight allocation to higher-yielding global fixed income over riskier assets such as global equities, with a preference for US and European corporate credit markets, agency spread products in the US, as well as emerging market debt, both local currency and dollar. 

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Related content 


The Flip Side podcast 

This podcast series features lively debates between Barclays’ Research analysts on important topics facing economies and businesses around the globe.

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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. Time to play defense is now available to Investment Bank clients on Barclays Live or on the Barclays Live app.

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