Our forecasts

Macro

Macro | Solid growth ahead

	Region	2017F		2018F
	United States	2.3		2.3
	Eurozone	2.3		2.0
	United Kingdom	1.5		1.3
	Japan	1.5		1.5
	China	6.7		6.5
	World	3.7		3.8

	Region	2017F		2018F
	United States	3.5		3.5
	Eurozone	1.4		1.3
	United Kingdom	3.3		3.5
	Japan	4.8		4.8
	China	3.4		3.2

	Region	2017F		2018F
	United States1	1.5		1.8
	Eurozone	1.5		1.4
	United Kingdom	2.6		2.7
	Japan	0.7		1.0
	China	1.9		2.2

	Region	2017F		2018F
	United States	-2.6		-2.8
	Eurozone	3.1		2.9
	United Kingdom	-4.5		-3.5
	Japan	3.5		3.5
	China	1.8		1.8

	Region	Current*		Dec 2018F
	United States	1.00-1.25		1.75-2.00
	Eurozone	0.00		0.00
	United Kingdom	0.50		0.75
	Japan	0.00		0.00
	China	4.35		4.35

		Current*		Dec 2018F
	Crude oil (WTI)	57.4		55
	Gold	1,275		1,230
	Copper (LME)	6,762		6,600

_{* Source Bloomberg Finance L.P. as of 11/30/17} ¹_{Core rate, personal consumption expenditure Dec/Dec in % (no average as for the other figures) F refers to our forecast as of 11/16/17 WTI = West Texas Intermediate LME = London Metal Exchange}

_{The arrows signal whether we expect to see an upward trend , a sideways trend or a downward trend .}

Equities

Equities | Well supported by earnings growth

		Current*		Dec 2018F	Total Return (expexted)1
				Forecast	in %	Expected earnings growth	P/E impact	Dividend yield
	United States (S&P 500)2	2,648		2,750	6.2	14%	-9%	2.3%
	Europe (Stoxx Europe 600)	387		405	8.4	8%	-3%	3.7%
	Eurozone (Euro Stoxx 50)	3,570		3,780	9.6	9%	-2%	3.7%
	Germany (Dax)3	13,024		14,100	8.3	8%	-3%	3.1%
	United Kingdom (FTSE 100)	7,327		7,400	5.3	5%	-4%	4.3%
	Switzerland (Swiss Market Index)	9,319		9,450	4.7	13%	-10%	3.3%
	Japan (MSCI Japan Index)	1,026		1,120	7.9	13%	-7%	2.4%
	MSCI Emerging Markets Index (USD)	1,121		1,210	10.7	15%	-6%	2.8%
	MSCI AC Asia ex Japan Index (USD)	696		760	11.8	16%	-5%	2.6%
	MSCI EM Latin America Index (USD)	2,719		2,850	7.7	10%	-5%	2.9%

_{* Sources: Bloomberg Finance L.P., FactSet Research Systems Inc. as of 11/30/17} ¹ _{Expected total return includes interest, dividends and capital gains where applicable} ² _{Revised target as of 12/4/17} ³_{Total-return index (includes dividends) F refers to our forecasts as of 11/16/17}

_{Equity indices, exchange rates and alternative investments: The arrows signal whether we expect to see an upward trend , a sideways trend or a downward trend . The arrows' 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.}

Fixed Income

Fixed Income | Yields likely to rise only slowly

				Dec 2018F
	United States
	U.S. Treasuries (10-year)	2.41%		2.60%
	U.S. municipal bonds	92%		85%
	U.S. investment-grade corporates	92 bp		80 bp
	U.S. high-yield corporates	344 bp		350 bp
	Securitized: mortgage-backed securities1	72 bp		100 bp
	Europe
	German Bunds (10-year)	0.37%		0.80%
	UK Gilts (10-year)	1.33%		1.40%
	Euro investment-grade corporates2	95 bp		75 bp
	Euro high-yield corporates2	272 bp		260 bp
	Securitized: covered bonds	46 bp		65 bp
	Italy (10-year)2	138 bp		160 bp
	Asia-Pacific
	Japanese government bonds (10-year)	0.04%		0.10%
	Asia credit	229 bp		210 bp
	Global
	Emerging-market sovereigns	288 bp		285 bp
	Emerging-market credit	285 bp		270 bp

_{* Source: Bloomberg Finance L.P. as of 11/30/17} ¹_{Current-coupon spread vs. 7-year U.S. Treasuries} ²_{Spread over German Bunds F refers to our forecasts as of 11/16/17 bp = basis points}

_{Fixed Income: For sovereign bonds, denotes rising yields, unchanged yields and falling yields. For corporates, securitized/specialties and emerging-market bonds, the arrows depict the option-adjusted spread over U.S. Treasuries. depicts a rising spread, a sideways trend and a falling spread. The arrows' 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.}

Currencies

		Current*		Dec 2018F
	EUR vs. USD	1.19		1.15
	USD vs. JPY	112.5		115.0
	EUR vs. GBP	0.880		0.885
	GBP vs. USD	1.35		1.30
	USD vs. CNY	6.61		6.80

_{* Source: Bloomberg Finance L.P. as of 11/30/17 F refers to our forecasts as of 11/16/17}