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Our forecasts

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Editorial

Macro

Macro | As good as it gets

GDP growth (in % year-on-year)

  Region 2018F 2019F

United States

2.6

2.4

Eurozone

2.3

1.9

United Kingdom

1.5

1.6

Japan

1.5

1.0

China

6.5

6.3

World

3.7

3.9

Fiscal deficit (in % of GDP)

  Region 2018F 2019F

United States

-4.1

-4.7

Eurozone

-0.9

-0.8

United Kingdom

-2.5

-2.7

Japan

-4.0

-3.8

China

-3.5

-3.2

Consumer price inflation (in %)

  Region 2018F 2019F

United States1

1.9

2.0

Eurozone

1.5

1.7

United Kingdom

2.7

2.1

Japan

1.0

1.4

China

2.0

2.2

Current-account balance (in % of GDP)

  Region 2018F 2019F

United States

-2.8

-3.0

Eurozone

3.0

2.9

United Kingdom

-4.0

-4.0

Japan

3.8

3.8

China

1.5

1.2

Benchmark rates (in %)

  Region Current* Mar 2019F

United States

1.50-1.75

2.25-2.50

Eurozone

0.00

0.00

United Kingdom

0.50

1.00

Japan

0.00

0.00

China

4.35

4.35

Commodities (in dollars)

  Current* Mar 2019F

Crude oil (WTI)

65.5

60

Gold

1,340

1,290

Copper (LME)

6,945

7,300

* Source Bloomberg Finance L.P. as of 4/10/18
1 Core rate, personal consumption expenditure Dec/Dec in % (no average as for the other figures)
F refers to our forecast as of 3/22/18
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 .
Deutsche Asset Management Investment GmbH as of 4/10/18

Equities

Equities | Volatility is back

  Current* Mar 2019F Total Return (expexted)1

Forecast

in %

Expected earnings growth

P/E impact

Dividend yield

United States (S&P 500)

2,657

2,850

9.6

14%

-6%

2.4%

Europe (Stoxx Europe 600)

378

390

6.6

7%

-4%

3.6%

Eurozone (Euro Stoxx 50)

3,439

3,640

9.7

9%

-3%

3.9%

Germany (Dax)2

12,397

13,500

8.9

8%

-2%

3.2%

United Kingdom (FTSE 100)

7,267

7,200

3.4

6%

-7%

4.3%

Switzerland (Swiss Market Index)

8,756

9,100

7.5

25%

-17%

3.5%

Japan (MSCI Japan Index)

1,024

1,080

7.8

5%

0%

2.3%

MSCI Emerging Markets Index (USD)

1,175

1,280

11.6

15%

-5%

2.7%

MSCI AC Asia ex Japan Index (USD)

725

790

11.5

13%

-3%

2.6%

MSCI EM Latin America Index (USD)

3,019

3,200

8.9

22%

-13%

2.9%

* Sources: Bloomberg Finance L.P., FactSet Research Systems Inc. as of 4/10/18
1 Expected total return includes interest, dividends and capital gains where applicable
2 Total-return index (includes dividends)
F refers to our forecasts as of 3/22/18
Equity indices: 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.
Source: Deutsche Asset Management Investment GmbH as of 4/10/18

Fixed Income

Fixed Income | We remain constructive

  Current* Mar 2019F

United States

U.S. Treasuries (10-year)

2.80%

3.25%

U.S. municipal bonds

88%

85%

U.S. investment-grade corporates

101 bp

80 bp

U.S. high-yield corporates

341 bp

350 bp

Securitized: mortgage-backed securities1

75 bp

95 bp

Europe

German Bunds (10-year)

0.52%

1.00%

UK Gilts (10-year)

1.41%

1.75%

Euro investment-grade corporates2

105 bp

75 bp

Euro high-yield corporates2

315 bp

260 bp

Securitized: covered bonds2

41 bp

51 bp

Italy (10-year)2

128 bp

120 bp

Asia-Pacific

Japanese government bonds (10-year)

0.04%

0.10%

Asia credit

230 bp

225 bp

Global

Emerging-market sovereigns

298 bp

285 bp

Emerging-market credit

290 bp

270 bp

* Source: Bloomberg Finance L.P. as of 4/10/18
1 Current-coupon spread vs. 7-year U.S. Treasuries
2 Spread over German Bunds
F refers to our forecasts as of 3/22/18; 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.
Source: Deutsche Asset Management Investment GmbH as of 4/10/18

Currencies

  Current* Mar 2019F

EUR vs. USD

1.24

1.15

USD vs. JPY

107.2

112.0

EUR vs. GBP

0.872

0.90

GBP vs. USD

1.42

1.28

USD vs. CNY

6.28

6.50

* Source: Bloomberg Finance L.P. as of 4/10/18
F refers to our forecasts as of 3/22/18
Exchange rates: The arrows signal whether we expect to see an upward trend
, a sideways trend or a downward trend .
Source: Deutsche Asset Management Investment GmbH as of 4/10/18

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