Mar 01, 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

Uneven growth ahead

GDP growth (in %, year-on-year) 2021F 2022F
United States 5.0   3.8
Eurozone 3.5   4.5
United Kingdom 4.5   6.0
Japan 2.5   3.0
China 8.7   5.5
World 5.3   4.4
Fiscal deficit (in % of GDP) 2021F 2022F
United States 14.6   4.5
Eurozone 7.0   5.0
United Kingdom 9.0   5.0
Japan 9.0   4.0
China 11.0   10.5
Consumer price inflation (in %, year-on-year) 2021F 2022F
United States[1] 2.0   2.2
Eurozone 1.3   1.4
United Kingdom 1.5   2.1
Japan -0.3   0.5
China 1.4   2.5
Current-account balance (in % of GDP) 2021F 2022F
United States -3.5   -3.5
Eurozone 2.6   2.8
United Kingdom -4.0   -3.5
Japan 3.5   3.5
China 1.2   1.1
Benchmark rates (in %) Current[2] Mar 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] Mar 2022F
Crude oil (WTI 12M forward) 54.8   57
Gold 1,776   1,850
Copper (LME) 8,553   8,400

Equities

Recovery vs. rates

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

Expected earnings growth

P/E impact

Dividend yield

United States
(S&P 500)

3,914
 
4,100 6.6% 20% -16% 1.9%

Europe
(Stoxx Europe 600)

413
 
415 3.9% 25% -25% 3.3%

Eurozone
(Euro Stoxx 50)

3,681
 
3,700 3.8% 25% -24% 3.3%

Germany
(DAX)[5]

13,887
 
14,800 6.6% 22% -19% 3.4%

United Kingdom
(FTSE 100)

6,617


 

6,750 6.7% 27% -25% 4.7%

Switzerland
(Swiss Market Index)

10,718


 

10,950 5.3% 11% -9% 3.1%

Japan
(MSCI Japan Index)

1,196
 
1,250 6.5% 14% -10% 2.1%

MSCI Emerging Markets Index
(USD)

1,425
 
1,500 7.5% 26% -21% 2.2%

MSCI AC Asia ex Japan Index
(USD)

944


 

1,000 8.0% 24% -18% 2.0%

F refers to DWS Investment GmbH forecasts as of 02/18/21

Fixed Income

Yields should stay low, after all

Current[2] Mar 2022F

United States

U.S. Treasuries (10-year) 1.30%   1.50%
U.S. municipal bonds[6] 62%   80%
U.S. investment-grade corporates 84 bp   80 bp
U.S. high-yield corporates 321 bp   330 bp
Securitized: mortgage-backed securities[7] 19 bp   39 bp
Europe
German Bunds (10-year) -0.35%   -0.30%
UK Gilts (10-year) 0.62%   0.60%
Euro investment-grade corporates[8] 95 bp   80 bp
Euro high-yield corporates[8] 322 bp   300 bp
Securitized: covered bonds[8] 31 bp   30 bp
Italy (10-year)[8] 99 bp   95 bp
Asia-Pacific
Japanese government bonds (10-year) 0.10%   0.15%
Asia credit 282 bp   250 bp
Global
Emerging-market sovereigns 347.025 bp   320 bp
Emerging-market credit 309 bp   300 bp

Currencies

Current[2] Mar 2022F
EUR vs. USD 1.21   1.15
USD vs. JPY 106   105
EUR vs. GBP 0.87   0.87
GBP vs. USD 1.40   1.32
USD vs. CNY 6.49   6.65


F refers to DWS Investment GmbH forecasts as of 2/18/21
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.

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

2. Source: Bloomberg Finance L.P. as of 2/18/21

3. Sources: Bloomberg Finance L.P., FactSet Research Systems Inc. as of 02/18/21

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

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