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• 2019 will see DM normalization broaden further with moves from the ECB (official rates) and the Bank of Japan (10y yield target), alongside rising balance sheet shrinkage from G3 central banks. 2018 has already shown that life with less G3 support will be trickier, which is one of the main drivers behind our slowing economic view for 2019 and 2020.
• The slowdown in global growth, however, will be modest. In the U.S., fiscal easing will still kick in during 2019. China will be supported by fiscal policy and growth in government-directed lending, alongside import substitution and a refocus of the economy on consumption and services. Eurozone growth, while slow, will still remain broad-based. Finally, we also see reasonable growth in other major EM economies.
• So what does this mean for policy and the financial markets? To find out, join us on our Outlook Conference Call on December 10, where we will also share our latest forecasts for 2019 and 2020.