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

Yield curve sends warning - April 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

  • The bond-market yield curve has inverted, meaning that the market is budgeting for less growth.

  • Historically, this has been a fairly predictive indicator of a recession, though the timing is uncertain (typically six to 20 months after the yield curve inversion).

  • The U.S Federal Reserve Board and the European Central Bank have been dovish lately as they pause their tightening monetary policies, which is supportive of economic growth.

  • As a result, the bond market is no longer pricing in rate hikes for 2019. In fact, it is now actively pricing in expectations of a rate cut in 2019.

  • The global stock market has rebounded substantially since the start of the year. While some of this is an instinctual response to dovish central banks, some presumably reflects upgraded growth expectations due to the extra monetary support.

  • U.S. bond yields have fallen, indicating increased risk aversion.

  • While the U.S. Q1 GDP forecast is tracking higher, it is still weak. However, first quarter data is historically distorted.

  • U.S.-China trade negotiations are making progress, and there is potential for a deal by April or May.

  • Oil is trading higher, which is a slight positive for the Canadian economy, yet household debt and housing market issues are still acting as headwinds.

  • Brexit is still in flux, and uncertainty regarding the outcome is still high. The current votes are tilting toward a 'softer' Brexit.

  • Italy has joined China's 'Belt and Road' economic initiative, splitting with its EU partners in pursuing a separate deal.

Global Investment Outlook

Our quarterly publication that provides a detailed global investment forecast, including updates on economic and capital markets.

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Current Perspectives

There has been a lot of talk in the markets lately about the bond yield curve inverting and what that could signal for the economy. Read our latest insight.

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