© Copyright Allianz...Mar 21, 2019 · 12% 14% 11 12 13 14 15 16 17 18 19 Brazil Chile Colombia Mexico Peru Forecasts 80 90 100 110 120 130 140 150 Jan-18 Jul-18 Jan-19 Brazil 2020

© Copyright Allianz


2.7

2.9 2.9

2.6

3.2

3.1

2.9

2.7

1.5

2.0

2.5

3.0

3.5

4.0

2013 2014 2015 2016 2017 2018 2019 2020

Annual World Growth

Forecasts


-1%

0%

1%

2%

3%

4%

5%

6%

13Q1 14Q1 15Q1 16Q1 17Q1 18Q1 19Q1 20Q1

Others

Fragile Four

Europe

APAC ex China ex Japan

India

Japan

China

US

World aggregate

18Q4:

+2.8%

Forecasts


1,7%

0,8%

0,2% 0,4%

2017 2018 2019 2020

Italy

7,4%

2,6% -0,7% 3,5%

2017 2018 2019 2020

Turkey

1,8% 1,4% 1,2% 1,0%

2017 2018 2019 2020

United Kingdom

3,0% 2,5%

2,0% 1,8%

2017 2018 2019 2020

Spain

1,9%

0,8%

0,8% 0,5

%

2017 2018 2019 2020

Japan

6,9% 6,6%

6,4% 6,2%

2017 2018 2019 2020

China

1,5%

2,3%

1,5% 1,5%

2017 2018 2019 2020

Russia

7,1%

7,2% 7,1

% 7,0%

2017 2018 2019 2020

India

1,4%

0,8% 1,0% 1,0%

2017 2018 2019 2020

South Africa

2,2%

2,9% 2,5%

1,7%

2017 2018 2019 2020

US

1,1% 1,1%

2,0%

2,5%

2017 2018 2019 2020

Brazil

-0,9%

2,2% 1,7%

2,0%

2017 2018 2019 2020

Saudi Arabia

2,3%

1,5% 1,2%

1,5%

2017 2018 2019 2020

France

2,5%

1,5% 1,0%

1,4%

2017 2018 2019 2020

Germany

2017 2018 2019 2020

World 3.2% 3.1% 2.9% 2.7%

Latin

America 1.2% 0.7% 1.8% 2.4%

Eurozone 2.5% 1.8% 1.2% 1.3%

Asia 5.3% 5.0% 4.8% 4.6%

Africa 3.1% 2.3% 2.8% 2.8%

Middle East 1.2% 1.8% 1.7% 2.1%


5000

7000

9000

11000

13000

15000

17000

19000

21000

23000

0

1000

2000

3000

4000

5000

6000

07 08 09 10 11 12 13 14 15 16 17 18 19 20

Fed (USD bn)

ECB (USD bn)

BoJ (USD bn)

Global liquidity proxy (USDbn) - rhs



US-CHINA BEYOND TRADE: LOWER SUPPLY OF GLOBAL

PUBLIC GOODS. EUROPE AT THE CROSSROADS


3,4% 4,0% 2,9% 2,4%

5,2% 3,8% 3,0% 2,7%

3,0% 2,2%

-10,6%

-1,5%

9,5% 8,5%

4,2% 2,9%

-15%

-10%

-5%

0%

5%

10%

15%

13 14 15 16 17 18e 19f 20f

Volume Price Value

1

1.1

1.2

1.3

1.4

1.5

1.6

0

20

40

60

80

100

120

140

13 14 15 16 17 18 19 20

Oil Brent$/bblCopper 100$/mt

USD/EUR (right-hand side)

Forecasts




50

100

150

200

250

300

81 84 87 90 93 96 99 02 05 08 11 14 17-1.5 -1 -0.5 0 0.5 1

Nondefense discretionary

Medicare

Other mandatory programs

Medicaid

Net interest

Social Security

Defense

1.7

1.9

2.1

2.3

2.5

2.7

2.9

3.1

1M 2M 3M 6M 1Y 2Y 3Y 5Y 7Y 10Y30Y

15 03 2019 01 06 2018


2

4

6

8

10

12

2

4

6

8

10

12

00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20

Forecast

-60

-40

-20

0

20

40

-100

-80

-60

-40

-20

0

20

40

60

00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19

Policy uncertainty index (reverse, LHS)

Durable goods orders (%, y/y, RHS)


0

5

10

15

20

25

30

-200

-150

-100

-50

0

50

100

150

00 03 06 09 12 15 18

Size of the Fed's balance sheet (% of GDP, RHS)

Monetary and financial condition index (LHS)

-1

0

1

2

3

4

5

6

7

-1

0

1

2

3

4

5

6

7

00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20

Observed

Theoretical

Forecast


-6

-4

-2

0

2

4

6

8

0.0

0.2

0.4

0.6

0.8

1.0

70 73 76 79 82 85 88 91 94 97 00 03 06 09 12 15 18

US recessions (=1 if true, LHS)

Deviation of US non-financial debt from its trend (as% of GDP), RHS



43

44

45

46

47

48

49

50

14

17

20

23

06

13

12

13

06

14

12

14

06

15

12

15

06

16

12

16

06

17

12

17

06

18

12

18

06

19

12

19

Aggregate Financing to the Real Economy (RMB tn,sum 12m, left)

Bankers survey Loan Approval Index (advanced 12m,right)

0

5

10

15

20

25

12 13 14 15 16 17 18 19

Nominal Retail sales (y/y)

Nominal Investment in Fixed Assets in Urbanareas (YTD, y/y)Nominal State controlled companies Investmentin Fixed Assets in Urban areas (YTD, y/y)





40

45

50

55

60

65

01/1

2

06/1

2

11/1

2

04/1

3

09/1

3

02/1

4

07/1

4

12/1

4

05/1

5

10/1

5

03/1

6

08/1

6

01/1

7

06/1

7

11/1

7

04/1

8

09/1

8

02/1

9

Manufacturing PMI

Services PMI


0

100

200

300

400

500

600

700

800

-32 0 32 64

Eurozone, indexedto 0 = Q2 2008

Japan, indexed to0 = Q2 1991

Respective peak

Q4 2020

Q2 2007

0

50

100

150

200

250

300

-32 0 32 64

Eurozone, indexed to0 = Q2 2008

Japan, indexed to 0 =Q2 1991

Respective peak

Q4 2020

85

90

95

100

105

110

115

120

-25 0 25 50 75

Eurozone, indexed to 0= Q2 2008

Japan, indexed to 0 =Q2 1991

Respective peak




13%

14%

15%

16%

17%

-8%

-6%

-4%

-2%

0%

2%

4%

6%

07 08 09 10 11 12 13 14 15 16 17 18 19

Purchasing power (left)

Fiscal balance (left

Saving rate (right)

300

350

400

450

500

550

600

42

43

44

45

46

47

48

49

07 08 09 10 11 12 13 14 15 16 17 18 19

Consumption

Housing permits


0

1

2

3

4

5

6

90

100

110

120

130

140

2006 2011 2016 2021

Budget deficit

Gov. Debt


-1.0

-0.5

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

2015 2016 2017 2018 2019 2020

Net exports Stocks

Investment Public Spending

Consumer Spending GDP

Forecasts

37%

38%

39%

40%

41%

42%

43%

44%

45%

-7

-5

-3

-1

1

3

5

7

12 13 14 15 16 17 18 19

Profit share of Gross Value Added (right-hand axis)

Unit Labor Cost (ULC) growth

PPI-CPI growth



2016 2017 2018 2020

Pro-Brexit vote

in June

EU exit

negotiations

with EU

EU exit

negotiations

with EU

Extension of Art 50

followed by agreement

towards a Soft Brexit

(70%)

No agreement,

disorderly Brexit,

WTO rules

(25%)

Stay in the EU

(5%)

Transition

period

Soft Brexit

(55%)

Limited FTA

(40%)

Hard Brexit

(5%)

Real GDP (y/y)1.8% 1.8% 1.4% 1.2% -1.0% 1.8% 1.0% 1.5% 0.5% -0.5%

Real private consumption (y/y) 3.1% 2.1% 1.7% 1.7% -1.0% 2.1% 1.5% 1.6% 0.8% -0.6%

Real business investment (y/y) -0.2% 1.5% -0.9% -1.5% -4.0% 2.6% 0.6% 1.4% -4.0% -3.0%

Real total exports (y/y) 1.0% 5.6% 0.2% 1.3% -5.0% 2.0% 1.4% 1.7% -2.5% -4.0%

Real total imports (y/y) 3.3% 3.5% 0.8% 2.2% -6.0% 3.0% 1.8% 2.2% -3.0% -5.0%

Inflation (CPI, y/y) 0.9% 2.7% 2.5% 2.2% 3.5% 2.0% 2.2% 2.1% 2.7% 3.0%

BoE benchmark interest rate 0.25% 0.50% 0.75% 1.00% 0.75% 1.00% 1.25% 1.50% 1.25% 1.25%

GBP/EUR (eop) 1.17 1.13 1.12 1.15 - 1.20 0.84 - 0.87 1.20 - 1.25 1.15-1.20 1.15 - 1.20 0.97 - 0.98 0.79 - 0.81

Business insolvencies (y/y) 0.0% -3.0% 10.0% 9.0% 20.0% 2.0% 6.0% 1.0% 4.0% 6.0%

2019 2021

NB:

Soft Brexit = Norway / Switzerland type of trade agreement

Limited FTA = CETA-type of trade agreement

Hard Brexit = WTO, Most Favored Nation principle will apply (equiv. to more than 5% weighted average on goods, 20% to 30% additional costs for trade in services)


-40

-20

0

20

40

60

80

100

12 13 14 15 16 17 18 19

Long-term average

35

40

45

50

55

08 09 10 11 12 13 14 15 16 17 18 19

Riskiest EMs

Open economies

40

42

44

46

48

50

52

54

56

58

60200

300

400

500

600

700

800

11 12 13 14 15 16 17 18 19

Emerging Markets' exchange rate (vs. USD, right)

Commodity prices (S&P GSCi, left)

Depreciation


•

•

•

•

Country Country

Americas Americas

C4 Argentina* (1) + (3a) C3 Ecuador (3a) + (3b)

Europe B3 Trinidad and Tobago (3b)

B2 Cyprus (1) Europe

C3 Turkey (1) B2 Croatia (2)

Middle East & Africa A2 Italy (2)

C3 Bahrain (3b) B2 Romania* (1) + (2)

B3 Jordan* (1) + (2) Asia-Pacific

C4 Tunisia* (1) + (2) C3 Vietnam (2)

Middle East & Africa

C3 Algeria* (1) + (3b)

C3 Cameroon* (1) + (3a) + (3b)

C3 Ethiopia (1) + (3a)

BB2 Oman (1) + (3b)

B3 South Africa* (1) + (3a)

D3 Zambia* (1) + (3a)

Most vulnerable More vulnerable

Euler Hermes

Country Rating

Channels of

vulnerability

Euler Hermes

Country Rating

Channels of

vulnerability


•

•

•

•

•

•

•

•

•

•

-5

5

15

25

35

45

55

65

08 09 10 11 12 13 14 15 16 17 18 19

Argentina Turkey

-8

-7

-6

-5

-4

-3

-2

-1

0

1

2

12 13 14 15 16 17 18 19

Argentina Turkey

-15

-10

-5

0

5

10

15

20

08 09 10 11 12 13 14 15 16 17 18 19

Argentina Turkey


-2

0

2

4

6

8

10

12

14

16

18

20

12 13 14 15 16 17 18

Czechia

Hungary

Poland

Romania

Slovakia

4.64.9

3.4

7.8

6.3

3.94.2

7.5

6.87.3

8.4

5.3

3.6

4.2

0

1

2

3

4

5

6

7

8

9

10

14 15 16 17 18 19 20

CEE-7 (CEE-5 + TR + RU)

CEE-5 (PL,CZ,RO,HU,SK)

-0.67(-0.9%)

-0.49(-0.5%)

-0.46(-0.2%)

-0.45(-0.3%)

-0.21(-0.3%)

-0.04 (-0.2%)

-0.8-0.6-0.4-0.20.0

Slovakia

Hungary

Poland

Czechia

Romania

SloveniaImpact from carsales to US

Impact from partssales to other EU


•

•

Gen. Gov

balance % GDP

Gen. Gov

debt % GDPFiscal leew ay

Inflation Q4

2018

Australia -1.4% 41% 1.9

China -4.1% 50% 1.9

Hong Kong 3.6% 0% 2.5

Indonesia -2.2% 30% 3.1

Japan -3.7% 238% 0.5

Korea (South) 2.3% 40% 1.4

Malaysia -2.7% 55% -0.1

New Zealand 0.8% 30% 1.9

Philippines -1.0% 40% 5.2

Singapore 2.3% 113% 0.4

Taiw an -1.9% 34% 0.1

Thailand -0.6% 42% 0.5

India -6.6% 70% 2.1

Orange w hen below w hen above w hen above

-3% 50% 2% for AE*

4% for EM*


2%

4%

6%

8%

10%

12%

14%

11 12 13 14 15 16 17 18 19

BrazilChileColombiaMexicoPeru

Forecasts

80

90

100

110

120

130

140

150

Jan-18 Jul-18 Jan-19

Brazil consumer confidenceBrazil business confidenceMexico consumer confidenceMexico business confidence

-5%

-3%

-1%

1%

3%

5%

7%

9%

10 11 12 13 14 15 16 17 18 19

Latin America activity index growth (y/y, %)

Latin America Industrial production growth (y/y, %)

2018 2019 2020

2018 2019 2020

2018 2019 2020

2018 20192020

2018 2020

2018 2020

20182019 2020

20182019 2020

20182019 2020

A1

B3

D4

Brazil

Venezuela

Argentina

Chile

BB1 Peru

BB2 Mexico

BB2Uruguay

-2.4%

2.3%

2.1%1.6%

2.0%1.1%

3.9%3.0%

3.3% 3.5%

2.7%3.1%

2.0%1.6%

-18%-5%

C4

2018 2019

Low risk

Medium risk

Sensitive risk

High risk

2020

1.9%

2.8%

-1.8%

2.0 %

-2%

2018 2019 2020

2018 2019 2020

2018 2019 20202018 2019 2020

2018 2019 2020

2018 2019 2020

2018 2019 2020

Data as of Q1 2019

2018 2019 2020

EcuadorC3

1.1%0.7%

1.3%

ColombiaBB1

3.0%

3.6%

2.5%



0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

0%

10%

20%

30%

40%

50%

60%

11 12 13 14 15 16 17 18

Oil sector in % of GDP

Government activity in % of non-oil sector

FDI inflows in % of GDP (RHS)2.1%

1.8%

1.9%

1.3% (-1.5pp)

2.5%

2.1% (-0.5pp)

1.7% (-0.8pp)

1.9% (-0.7pp)

1.6%

1.8%

0.7%

2.0%

2.2%

2.2%

2.0%

0% 1% 2% 3% 4%

Bahrain

Oman

Kuwait

Qatar

UAE

Saudi Arabia

GCC

2018e

2019f

2020f

Bahrain

Kuwait

Oman Qatar

Saudi Arabia

UAE

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

-10% -8% -6% -4% -2% 0% 2% 4% 6% 8% 10%

Fiscal balance as % of GDPP

ub

lic

de

bt

as

% o

f G

DP


•

•

•

-40%

-30%

-20%

-10%

0%

10%

20%

30%

40%

Dec-79 Dec-84 Dec-89 Dec-94 Dec-99 Dec-04 Dec-09 Dec-14 Dec-19

Per

cen

tage

of

EB

ITD

A

USA: FLOWS OF FUNDS FOR THE NON-FINANCIAL CORPORATE SECTOR

Recessions Equity Debt


-300

-200

-100

0

100

200

300

400

500

600

1959 1969 1979 1989 1999 2009 2019

USA: Estimate of the BAA/Treasuries spreadbased on adjusted non-financial sector debt-to-EBIDTA ratio

Recession

BAA / Treasurie Spread

In-sample estimate

Out-of-sample forecast

Valuation indicator

•

•

•


•

•

-0,08%

-0,06%

-0,04%

-0,02%

0,00%

0,02%

0,04%

0,06%

0,08%

0,10%

0,12%

Very bad (X<<0) Bad (X<0) Good (X>0) Very good (X>>0)

Conditional covariance with the S&P 500 (X)

MSCI EM (Y) Dax Composite (Y)

SBF 250 (Y) Oil (Y)

EM HC bonds (Y) US high yield (Y)

US credit aggregate (Y) Eur/USD * (Y)

UST 7-10 years * (Y) EM LC bonds (Y)


Documents

© Copyright Allianz...Mar 21, 2019 · 12% 14% 11 12 13 14 15 16 17 18 19 Brazil Chile Colombia Mexico Peru Forecasts 80 90 100 110 120 130 140 150 Jan-18 Jul-18 Jan-19 Brazil 2020