Our forecasts

All forecasts at a glance

Macro | Rising risks

GDP growth (in %, year-on-year) 2019F 2020F
United States 2.3 2.0
Eurozone 1.2 1.1
United Kingdom 1.3 1.3
Japan 0.6 0.2
China 6.2 6.0
World 3.3 3.4
Fiscal deficit (in % of GDP) 2019F 2020F
United States 4.4 4.6
Eurozone 0.9 0.9
United Kingdom 1.6 1.6
Japan 3.3 2.7
China 4.8 3.8
Consumer price inflation (in %, year-on-year) 2019F 2020F
United States[1] 1.9 2.0
Eurozone 1.4 1.4
United Kingdom 1.9 2.0
Japan 0.7 1.3
China 1.7 1.8
Current-account balance (in % of GDP) 2019F 2020F
United States -2.7 -2.6
Eurozone 3.3 3.2
United Kingdom -4.3 -3.8
Japan 3.2 3.5
China 0.4 0.2
Benchmark rates (in %) Current[2] Sept 20F
United States 2.00-2.25 1.50-1.75
Eurozone 0.00 0.00
United Kingdom 0.75 0.75
Japan 0.00 0.00
China 4.35 4.10
Commodities (in dollars) Current[2] Sept 20F
Crude oil (WTI) 55.4 54
Gold 1,498 1,575
Copper (LME) 5,683 6,300

Equity | Lean times ahead?

Current[3] Sept 2020F
Forecast
Total
Return (exp.)[4]
Expected
earnings growth
P/E
impact
Dividend
yield
United States
(S&P 500)
2,923   3,000 4,7% 5%

-2%

2.0%
Europe
(Stoxx Europe 600)
374 370 2.5% 5% -6% 3.6%
Eurozone
(Euro Stoxx 50)
3,374 3,300 1.5% 5% -7% 3.7%
Germany
(Dax)[5]
11,747   12,000 2.2% 6% -7% 3.3%
United Kingdom
(FTSE 100)
7,128   7,100 3.5% 2% -3% 4.8%
Switzerland
(Swiss Market Index)
9,806 9,800 3.2% 6% -6% 3.2%
Japan
(MSCI Japan Index)
906   910 2.9% -4% 4% 2.5%
MSCI Emerging
Markets Index (USD)
976 1,000 5.5% 7% -4% 3.0%
MSCI AC Asia
ex Japan Index (USD)
605 620 5.1% 6% -3% 2.7%

Fixed Income | Negative yields all over the place

Current[2] Sept 2020F
United States
U.S. Treasuries (10-year) 1.61% 1.75%
U.S. municipal bonds[6] 80% 80%
U.S. investment-grade corporates 112 bp 105 bp
U.S. high-yield corporates 393 bp   440 bp
Securitized: mortgage-backed securities[7] 50 bp 35 bp
Europe
German Bunds (10-year) -0.64%   -0.50%
UK Gilts (10-year) 0.52%   0.95%
Euro investment-grade corporates[8] 120 bp   90 bp
Euro high-yield corporates[8] 370 bp 380 bp
Securitized: covered bonds[8] 49 bp 45 bp
Italy (10-year)[8] 195 bp

 

240 bp
Asia-Pacific
Japanese government bonds (10-year)   -0.24%   -0.10%
Asia credit   276 bp 295 bp
Global
Emerging-market sovereigns 360 bp 350 bp
Emerging-market credit   349 bp 350 bp

Currencies

Current[2] Sept 2020F
EUR vs. USD   1.11 1.15
USD vs. JPY 106 105
EUR vs. GBP 0.90 0.89
GBP vs. USD   1.23 1.29
USD vs. CNY

7.08

7.10

F refers to our forecasts as of 8/22/19
WTI = West Texas Intermediate
LME = London Metal Exchange
bp = basis points

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

08/14 - 08/15 08/15 - 08/16 08/16 - 08/17 08/17 - 08/18 08/18 - 08/19
Asia credit 2.1% 10.2% 2.4% -0.9% 10.9%
Dax 8.3% 3.2% 13.8% 2.6% -3.4%
Emerging-market sovereigns -3.0% 14.8% 4.5% -4.6% 13.1%
Emerging-markets credit -1.1% 10.9% 5.8% -1.4% 11.8%
Euro high-yield corporates 2.0% 6.8% 6.4% 1.2% 4.8%
Euro investment-grade corporates 0.4% 6.7% 0.6% 0.0% 6.7%
Euro securitized: covered bonds 2.1% 3.7% -1.0% 0.4% 4.9%
Euro Stoxx 50 5.7% -4.8% 16.1% 1.8% 3.8%
FTSE 100 -5.0% 13.0% 14.0% 4.1% 1.4%
German Bunds (10-year) 2.3% 8.0% -2.0% 1.2% 8.5%
Italy (10-year) 4.7% 9.0% -3.3% -6.6% 22.1%
Japanese government bonds (10-year) 2.0% 3.8% -0.4% -0.5% 3.6%
MSCI AC Asia ex Japan Index -16.1% 12.9% 24.8% 2.8% -6.3%
MSCI Emerging Market Index -22.9% 11.8% 24.5% -0.7% -4.4%
MSCI Japan Index 4.2% 2.9% 13.7% 9.0% -5.6%
S&P 500 0.5% 12.6% 16.2% 19.7% 2.9%
Stoxx Europe 600 9.4% -1.9% 12.5% 5.7% 3.0%
Swiss Market Index 5.0% -3.7% 12.4% 4.0% 14.0%
U.S. high-yield corporates -2.9% 9.1% 8.6% 3.4% 6.6%
U.S. investment-grade corporates -0.4% 9.1% 1.9% -1.0% 13.0%
U.S. securitized: mortgage-backed securities 2.7% 3.9% 0.8% -0.5% 7.1%
U.S. Treasuries (10-year) 3.4% 7.0% -1.4% -3.1% 13.7%
UK Gilts (10-year) 5.4% 12.3% -1.0% -1.1% 9.2%
Source: Bloomberg Finance L.P. as of 8/30/19
Past performance is not indicative of future returns. Forecasts are based on assumptions, estimates, opinions and hypothetical models that may prove to be incorrect. DWS Investment GmbH as of 8/30/19.

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

2. Source: Bloomberg Finance L.P. as of 8/22/19

3. Source: Bloomberg Finance L.P., FactSet Research Systems Inc. as of 8/22/19

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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