World GDP growth to be resilient in 2018 and 2019, despite US sources of instability including mid-term elections and erratic policy-making:

  1. The eye of the cyclone: US fiscal, monetary and trade policies create a high pressure economy in the US while absorbing global liquidities
  2. The stable vortex: China, the Eurozone and Japan can absorb the negative shocks of liquidity and (trade) uncertainty, albeit registering slower growth
  3. The unstable vortex: Emerging markets from (1) those combining structural vulnerabilities and mistakes (Argentina and Turkey) to (2) tightrope walkers (South Africa, Brazil and Russia). Among resilient ones, some are (3) on the watch list ( India, Indonesia, Philippines,  Hungary, Romania) and the (4) others will stay safe in a “trade game” environment (emerging Asia & Europe countries with current account surpluses)

Macro assumptions: Brent oil prices at 72 USD/bbl in 2018 and 69 USD/bbl in 2019. EUR/USD at 1.14 at the end of 2018, emerging currencies to continue sliding by 5-10% on average in H2 18, stabilizing  in H1 19

Inflation and interest rates: The peak of inflation is behind us in advanced economies but rising price pressures in the emerging markets post currency depreciation. We expect US 10Y interest rate to be at 3.0% at the end of 2018 and 3.4% at the end of 2019