Global Outlook

March 2017

March 2017

In this edition we consider:

• The complicated issue of UK-EU negotiations through the Article 50 process
• The recovery in the container shipping sector after a tough 2016
• Diverging inflation trends in emerging markets and the implications for monetary policy
• A welcome change in attitude towards corporate governance in Japan
• The opportunities that exist in emerging market credit
• Why the Australian economy is facing challenges to its multi-decade period of economic growth

March 2017 PDF

Spotlight

Stephanie Kelly,
Political Economist

With Article 50 set to be triggered, we consider the options for a new UK-EU relationship. We can use game theory to try and assess which outcome is most likely based on the signals that both parties are sending at present.

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Global Equities

Mikhail Zverev,
Head of Global Equities

The container shipping sector has been through a tough time as overcapacity and stuttering demand sent freight rates plummeting. However, the structural and cyclical outlook for the sector looks more encouraging.

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Emerging Market Debt

Nicolas Jaquier,
Economist, Emerging Market Debt

While we are seeing a broad-based upswing in emerging market growth, inflation trends are moving in different directions. This will have important implications for monetary policy settings that we do not think are fully reflected in asset prices.

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Governance

Alison Kennedy,
Governance & Stewardship Director

There has been significant change in the governance environment in Japan, driven by a desire to revitalise the economy and push companies to improve capital efficiency.

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Emerging Market Credit

Samantha Lamb,
Investment Director, Credit

Following President Trump’s election, many assumed that a stronger dollar and risks around trade policy would be negative for emerging markets. However, the underlying picture is more nuanced and we have seen a recovery from the initial sell-off.

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Absolute Returns

Gerry Fowler,
Multi-Asset Strategist

The Australian economy has remained remarkably immune to a stuttering global economy since the financial crisis. However, it still faces challenges both at home and abroad, even in the midst of a global cyclical upturn.

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