Economic Outlook - RBC Global Asset Management

Economic Outlook

Hear directly from RBC Global Asset Management Chief Economist, Eric Lascelles in his monthly and quarterly updates. Representing RBC GAM Investment Strategy Committee's (RISC) economic views, Eric shares timely insights and the expectations of RBC GAM on the global economy.

Monthly Economic Outlook Webcast

Monthly Economic Outlook Webcast

Central banks to the rescue - March 2019

Eric Lascelles, Chief Economist, RBC Global Asset Management, shares the latest views on the global economy and offers insight into today’s economic issues.

The webcast includes an audio and slide presentation.

Launch Presentation

Key Highlights

  • Central banks broadly have chosen not to raise key interest rates further for the time being, acknowledging that economic conditions are not as favourable as they had hoped for.

  • Financial markets have viewed this dovishness in a positive light as it seems to increase the prospect of the market cycle lengthening. As a result, risk assets such as stocks have rebounded, recovering the extreme losses of December 2018, and credit spreads have come in.

  • Other positive factors that have contributed to this rebound include the hope of the United States finalizing a trade deal with China, as negotiations are now said to be in the “final stages.”

  • In addition, China has delivered additional economic stimulus and reported better-than-expected economic data (PMI, credit growth).

  • The U.S. government shutdown appears to be over now for good, and Brexit has likely been delayed to the summer, to some extent reducing the risk of a “hard” separation that would cause heavy economic damage.

  • While economic growth is slowing, including U.S. and Canadian GDP after a heady rate in 2018, consistent with the leading indicators we monitor, the current growth rate is not bad, and inflation remains tame or even slightly lower.

  • Although we are clearly in the late stages of the business cycle and advancing, there are no signs of an imminent recession.

  • On the negative side, there may be further tariff battles ahead, possibly involving autos and targeting Japan and Europe, or possibly against India or Turkey.

  • China has cut its 2019 growth target to 6%, which is consistent with our expectations.

  • Geo-political risks include tensions between Pakistan and India; the United States and North Korea, who still have not come to an agreement on nuclear issues; also of concern are disruptions in France (yellow vest movement) and political frictions in Venezuela.

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