Sep 03, 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

Recovery normalizes

GDP growth (in %, year-on-year)

2021F

2022F

United States 6.2   4.7
Eurozone 4.5   4.6
United Kingdom 6.8   5.3
Japan 2.7   2.6
China 8.2   5.6
World 5.8   4.5

Fiscal deficit (in % of GDP)

2021F

2022F

United States 14.7   6.9
Eurozone 9.0   5.0
United Kingdom 9.0   6.0
Japan 7.5   5.5
China 8.3   8.7

Consumer price inflation (in %, year-on-year)

2021F

2022F

United States[1] 3.0   2.5
Eurozone 2.1   1.6
United Kingdom 2.3   2.6
Japan 0.1   0.6
China 1.2   2.4

Current-account balance (in % of GDP)

2021F

2022F

United States -3.6   -3.3
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]

Sept 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]

Sept 2022F

Crude oil (WTI 12M forward) 65.4   68
Gold 1,792   1,720
Copper (LME) 9,300   10,000

Equities

Surprising earnings, in 2021

Current[3]

Sept 2022F

Total Return (exp.)[4]

Expected earnings growth

P/E impact

Dividend yield

United States
(S&P 500)

4,470 4,600 4.7% 9% -6% 1.8%

Europe
(Stoxx Europe 600)

470 480 5.5% 15% -13% 3.4%

Eurozone
(Euro Stoxx 50)

4,170 4,250 5.2% 14% -13% 3.2%

Germany
(DAX)[5]

15,794 16,700 5.7% 13% -10% 3.3%

United Kingdom
(FTSE 100)

7,125 7,000 2.4% 7% -8% 4.2%

Switzerland
(Swiss Market Index)

12,409 12,250 1.8% 13% -14% 3.1%

Japan
(MSCI Japan Index)

1,186 1,200 3.4% 20% -19% 2.2%

MSCI Emerging Markets Index
(USD)

1,266 1,310 6.3% 17% -13% 2.9%

MSCI AC Asia ex Japan Index
(USD)

812 840 6.0% 16% -13% 2.6%

F refers to DWS Investment GmbH forecasts as of 8/26/21

Fixed Income

Range bound

Current[2]

Sept 2022F

United States
U.S. Treasuries (10-year) 1.35%   2.00%
U.S. high-yield municipal bonds[6] 183 bp   200 bp
U.S. investment-grade corporates 83 bp   75 bp
U.S. high-yield corporates 296 bp   290 bp
Securitized: mortgage-backed securities[7] 16 bp   30 bp
Europe
German Bunds (10-year) -0.41%   0.00%
UK Gilts (10-year) 0.60%   1.00%
Euro investment-grade corporates[8] 97 bp   75 bp
Euro high-yield corporates[8] 307 bp   280 bp
Securitized: covered bonds[8] 36 bp   30 bp
Italy (10-year)[8] 108 bp   125 bp
Asia-Pacific
Japanese government bonds (10-year) 0.03%   0.20%
Asia credit 285 bp   275 bp
Global
Emerging-market sovereigns 347 bp   300 bp
Emerging-market credit 310 bp   290 bp

Currencies

Current[2]

Sept 2022F

EUR vs. USD 1.18   1.20
USD vs. JPY 110   108
EUR vs. GBP 0.86   0.87
GBP vs. USD 1.37   1.37
USD vs. CNY 6.48   6.65


F refers to DWS Investment GmbH forecasts as of 8/26/21
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 8/26/21

3. Sources: Bloomberg Finance L.P., FactSet Research Systems Inc. as of 8/26/21

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. Spread over U.S. Treasuries

7. Bloomberg Barclays MBS Forward Index

8. Spread over German Bunds

CIO View

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