Our forecasts

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

Macro | A slower recovery

GDP growth (in %, year-on-year) 2020F 2021F
United States -5.4   4.2
Eurozone -8.5   5.5
United Kingdom -9.5   6.0
Japan -5.5   3.3
China 2.0   8.5
World -3.8   5.3
Fiscal deficit (in % of GDP) 2020F 2021F
United States 21.0   7.0
Eurozone 10.0   6.0
United Kingdom 10.0   6.0
Japan 7.0   2.8
China 12.1   10.7
Consumer price inflation (in %, year-on-year) 2020F 2021F
United States[1] 1.2   1.7
Eurozone 0.3   1.0
United Kingdom 0.9   1.8
Japan -0.3   0.1
China 2.8   1.8
Current-account balance (in % of GDP) 2020F 2021F
United States -2.1   -2.3
Eurozone 3.4   3.0
United Kingdom -3.8   -4.3
Japan 2.5   3.0
China 1.4   1.2
Benchmark rates (in %) Current[2] Sep 21F
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] Sep 21F
Crude oil (WTI 12M forward) 42.6   49
Gold 1,947   2,100
Copper (LME) 6,602   6,610

Equities | Stretched valuations

Current[3] Sep 2021F Forecast Total Return (exp.)[4]

Expected earnings growth

P/E impact

Dividend yield

United States

(S&P 500)

3,386
 
3,300 -0.8% 13% -16% 1.7%

Europe

(Stoxx Europe 600)

366
 
370 4.1% 6% -4% 2.9%

Eurozone

(Euro Stoxx 50)

3,274
 
3,300 3.8% 6% -5% 3.0%

Germany

(DAX)[5]

12,830
 
12,700 -1.0% 14% -18% 2.7%

United Kingdom

(FTSE 100)

6,013


 

6,150 6.4% 2% 0% 4.1%

Switzerland

(Swiss Market Index)

10,230


 

10,500 5.6% 5% -2% 3.0%

Japan

(MSCI Japan Index)

973
 
950 -0.5% -8% 6% 1.9%

MSCI Emerging Markets Index

(USD)

1,081
 
1,100 4.2% 13% -11% 2.4%

MSCI AC Asia ex Japan Index

(USD)

706


 

740 6.9% 11% -6% 2.2%
F refers to our forecasts as of 8/20/20

Fixed Income | Constructive on credits

Current[2] Sep 2021F

United States

U.S. Treasuries (10-year) 0.65%   0.90%
U.S. municipal bonds[6] 110%   90%
U.S. investment-grade corporates 124 bp   135 bp
U.S. high-yield corporates 502 bp   450 bp
Securitized: mortgage-backed securities[7] 52 bp   40 bp
Europe
German Bunds (10-year) -0.50%   -0.50%
UK Gilts (10-year) 0.23%   0.30%
Euro investment-grade corporates[8] 124 bp   120 bp
Euro high-yield corporates[8] 473 bp   450 bp
Securitized: covered bonds[8] 38 bp   40 bp
Italy (10-year)[8] 141 bp   150 bp
Asia-Pacific
Japanese government bonds (10-year) 0.04%   0.00%
Asia credit 322 bp   300 bp
Global
Emerging-market sovereigns 423 bp   400 bp
Emerging-market credit 388 bp   370 bp

Currencies

Current[2] Sep 2021F
EUR vs. USD 1.19   1.15
USD vs. JPY 106   105
EUR vs. GBP 0.90   0.90
GBP vs. USD 1.32   1.27
USD vs. CNY 6.92   7.00

F refers to our forecasts as of 8/20/20
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.

Performance over the past 5 years (12-month periods)


07/15 - 07/16 07/16 - 07/17 07/17 - 07/18 07/18 - 07/19 07/19 - 07/20
Asia credit 8.6% 2.2% -0.5% 9.8% 7.1%
Dax -8.6% 17.2% 5.7% -4.8% 1.0%
Emerging-market sovereigns 11.6% 4.6% -1.1% 10.3% 4.1%
Emerging-markets credit 7.4% 6.2% 0.6% 10.1% 6.1%
Euro high-yield corporates 3.7% 8.1% 1.6% 4.1% -1.1%
Euro investment-grade corporates 5.6% 0.3% 0.6% 6.0% -0.4%
Euro securitized: covered bonds 3.5% -1.5% 0.7% 4.1% 0.5%
Euro Stoxx 50 -14.5% 18.3% 5.0% 1.1% -6.5%
FTSE 100 4.5% 14.0% 9.4% 2.2% -19.2%
German Bunds (10-year) 7.3% -3.8% 1.9% 7.4% 0.2%
Italy (10-year) 7.4% -3.4% -2.4% 13.3% 5.3%
Japanese government bonds (10-year) 5.2% -2.1% 0.5% 2.1% -1.0%
MSCI AC Asia ex Japan Index -1.5% 27.3% 5.2% -3.0% 12.3%
MSCI Emerging Market Index -0.8% 24.8% 4.4% -2.2% 6.5%
MSCI Japan Index -3.5% 14.2% 8.8% -4.4% 1.3%
S&P 500 5.6% 16.0% 16.2% 8.0% 12.0%
Stoxx Europe 600 -10.4% 14.3% 7.3% 2.3% -5.0%
Swiss Market Index -10.7% 15.1% 4.8% 11.7% 4.3%
U.S. high-yield corporates 5.0% 10.9% 2.6% 6.9% 4.1%
U.S. investment-grade corporates 8.3% 1.3% -0.7% 10.1% 11.9%
U.S. securitized: mortgage-backed securities 3.9% 0.2% -0.4% 6.8% 5.4%
U.S. Treasuries (10-years) 8.0% -3.8% -2.7% 10.6% 13.8%
UK Gilts (10-years) 11.8% -1.4% -0.1% 7.8% 4.9%

Sources: Bloomberg Finance L.P., DWS Investment GmbH as of 7/31/20
Past performance is not indicative of future returns. Forecasts are based on assumptions, estimates, opinions and hypothetical models that may prove to be incorrect.

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

2. Source: Bloomberg Finance L.P. as of 8/20/20

3. Sources: Bloomberg Finance L.P., FactSet Research Systems Inc. as of 8/20/20

4. Expected total return includes interest, dividends and capital gains where applicable

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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