TORONTO, Oct. 10, 2019 /CNW/ - Scotiabank Economics today
published its Q4 Global Economic Outlook report. This comprehensive
report explores the effects of US trade policies on global business
spending for the remainder of 2019 and into 2020.
"There are now clear signs that Trump's trade policies, along
with a raft of other Trump-related developments, are leading to a
pull-back in global business spending," said Jean-François
Perrault, Senior Vice President and Chief Economist at Scotiabank.
"Nowhere is this more evident than in the manufacturing industries,
where global manufacturing PMIs are in contractionary territory,
mirroring the global slowdown in trade and industrial
production.
"The good news in all of this is that we still think it is
relatively easy for President Trump to reverse some of the damage
he has so far caused," he continued. "A deal with China and less aggressive posturing on trade
would have immediate positive impacts on sentiment and
markets."
Highlights of Scotiabank's Q4 Global Economic Outlook
include:
- Canada: Growth should
accelerate modestly next year if there is no further increase in
trade-related uncertainty. Though risks of a recession exist, we do
not think we are headed for a period of protracted weakness. That
view could change if uncertainty rises significantly.
- United States: Growth
is moderating as the damage from erratic and misguided policymaking
sets in, but neither secular stagnation nor stagflation are looming
on the horizon and the economy remains supported by the
still-buoyant US consumer.
- Canada & US Monetary
Policy: We forecast that both the Bank of Canada and the US Federal Reserve will cut key
interest rates twice (50 bps total) through the first quarter of
2020 and hold rates at 1.25% and 1.50%, respectively, through our
forecast horizon.
- United Kingdom: We expect the economy in the UK
will move sideways until Brexit is resolved, with a shallow pick-up
taking hold in late 2020 and into 2021.
- Eurozone: Our forecast calls for Eurozone inflation
to remain below the ECB's nearly 2% target into 2021. We expect
growth to remain middling over this period, with risks to the
downside stemming from a re-opening of Europe's trade tensions with the US.
- China: Downward
pressure is intensifying and the US-China trade war is adversely
impacting the Chinese manufacturing sector and the country's
exporters.
- Commodities: Softer macroeconomic conditions and
steadily-worsening trade tensions have markets on the defensive.
Industrial commodity prices have waned amidst lowered demand
expectations while gold prices have boomed.
Read Scotiabank's Global Outlook online here.
Scotiabank provides clients with in-depth research into the
factors shaping the outlook for Canada and the global economy, including
macroeconomic developments, currency and capital market trends,
commodity and industry performance, as well as monetary, fiscal and
public policy issues. Follow this research on Twitter at
@ScotiaEconomics.
About Scotiabank
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international bank and a leading financial services provider in the
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customers become better off through a broad range of advice,
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trillion (as at July 31,
2019), Scotiabank trades on the Toronto Stock Exchange (TSX:
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please visit www.scotiabank.com and follow us on Twitter
@ScotiabankViews.
SOURCE Scotiabank