Jun 02, 2021 Forecasts

Our forecasts

In light of the very dynamic market environment these forecasts are subject to change at any time.

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Macro

Full speed ahead

GDP growth (in %, year-on-year) 2021F 2022F
United States 6.7   5.2
Eurozone 4.2   4.6
United Kingdom 6.5   5.7
Japan 2.7   2.6
China 8.7   5.5
World 5.8   4.6
Fiscal deficit (in % of GDP) 2021F 2022F
United States 16.5   5.4
Eurozone 9.0   5.0
United Kingdom 10.0   6.0
Japan 7.5   5.5
China 9.6   8.7
Consumer price inflation (in %, year-on-year) 2021F 2022F
United States[1] 2.8   2.5
Eurozone 2.0   1.6
United Kingdom 2.1   2.6
Japan 0.1   0.5
China 1.7   2.4
Current-account balance (in % of GDP) 2021F 2022F
United States -3.5   -3.5
Eurozone 2.7   2.8
United Kingdom -3.5   -3.5
Japan 3.7   3.7
China 1.5   1.3
Benchmark rates (in %) Current[2] June 2022F
United States 0.00-0.25   0.00-0.25
Eurozone -0.50   -0.50
United Kingdom 0.10   0.10
Japan 0.00   0.00
China 3.85   3.55
Commodities (in dollars) Current[2] June 2022F
Crude oil (WTI 12M forward) 62.9   57
Gold 1,897   1,850
Copper (LME) 10,221   8,400

Equities

Time to take a pause

Current[3] June 2022F Forecast Total Return (exp.)[4]

Expected earnings growth

P/E impact

Dividend yield

United States
(S&P 500)

4,201
 
4,200 1.8% 17% -17% 1.8%

Europe
(Stoxx Europe 600)

446
 
440 1.9% 23% -24% 3.3%

Eurozone
(Euro Stoxx 50)

4,039
 
4,000 2.2% 22% -23% 3.2%

Germany
(DAX)[5]

15,407
 
15,700 1.9% 20% -21% 3.3%

United Kingdom
(FTSE 100)

7,020


 

7,100 6.0% 23% -22% 4.8%

Switzerland
(Swiss Market Index)

11,340


 

11,150 1.3% 10% -12% 3.0%

Japan
(MSCI Japan Index)

1,173
 
1,200 4.4% 23% -20% 2.1%

MSCI Emerging Markets Index
(USD)

1,354
 
1,400 5.9% 23% -20% 2.5%

MSCI AC Asia ex Japan Index
(USD)

881


 

940 9.0% 22% -16% 2.3%

F refers to DWS Investment GmbH forecasts as of 5/27/21

Fixed Income

Look for carry

Current[2] June 2022F

United States

U.S. Treasuries (10-year) 1.61%   2.00%
U.S. municipal bonds[6] 60%   80%
U.S. investment-grade corporates 81 bp   75 bp
U.S. high-yield corporates 302 bp   290 bp
Securitized: mortgage-backed securities[7] -6 bp   15 bp
Europe
German Bunds (10-year) -0.17%   0.00%
UK Gilts (10-year) 0.81%   0.95%
Euro investment-grade corporates[8] 96 bp   75 bp
Euro high-yield corporates[8] 304 bp   300 bp
Securitized: covered bonds[8] 30 bp   30 bp
Italy (10-year)[8] 111 bp   125 bp
Asia-Pacific
Japanese government bonds (10-year) 0.08%   0.20%
Asia credit 272 bp   240 bp
Global
Emerging-market sovereigns 333.645 bp   300 bp
Emerging-market credit 301 bp   270 bp

Currencies

Current[2] June 2022F
EUR vs. USD 1.22   1.20
USD vs. JPY 110   105
EUR vs. GBP 0.86   0.89
GBP vs. USD 1.42   1.35
USD vs. CNY 6.38   6.65


F refers to DWS Investment GmbH forecasts as of 5/27/21
WTI = West Texas Intermediate
LME = London Metal Exchange
bp = basis points

Legend:

  • Macro data exchange rates and alternative investments: The arrows signal whether we expect to see an upward trend  , a sideways trend  or a downward trend  .
  • The signals' colors illustrate the return opportunities for long-only investors:  positive return potential for long-only investors.  limited return opportunity as well as downside risk.  negative return potential for long-only investors.

Recovery on track - time to take a break

The economy is coping well with Covid-19 but we continue to expect low interest rates. The conditions for risk investments would look good if it weren't for valuations.
Read more

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Blue economy: A new twist in an old tragedy

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May 28, 2021 Americas

This time is different

Despite last month's weak payroll figures, the turnaround in U.S. labor markets has been dramatic.

1. core rate, personal consumption expenditure Dec/Dec in % (no average as for the other figures)

2. Source: Bloomberg Finance L.P. as of 5/27/21

3. Sources: Bloomberg Finance L.P., FactSet Research Systems Inc. as of 5/27/21

4. Expected total return includes interest, dividends and capital gains where applicable. Dividends are not guaranteed. The amount of dividend payments can change or not take place at all.

5. Total-return index (includes dividends)

6. Ratio of 10-year AAA Municipal yield to 10-year U.S. Treasuries yield

7. Bloomberg Barclays MBS Forward Index

8. Spread over German Bunds

CIO View

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