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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This information is subject to change at any time, based upon economic, market and other considerations and should not be construed as a recommendation. 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 8/20/20
CRC 077966 (08/2020)

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