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Our forecasts

All forecasts at a glance

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Editorial

Macro

Macro | The costs of trading insults

GDP growth in % (year-on-year)

  Region 2018F 2019F

United States

2.7

2.4

Eurozone

2.2

1.9

United Kingdom

1.4

1.6

Japan

1.5

1.0

China

6.5

6.3

World

3.9

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

2.5

2.0

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

-3.8

-4.0

Japan

3.8

3.8

China

1.5

1.2

Benchmark rates in %

  Region Current* Jun 2019F

United States

1.75-2.00

2.50-2.75

Eurozone

0.00

0.00

United Kingdom

0.50

0.75

Japan

0.00

0.00

China

4.35

4.35

Commodities (in U.S. dollars)

  Current* Jun 2019F

Crude oil (WTI)

74.2

60

Gold

1,253

1,290

Copper (LME)

6,626

7,050

* Source Bloomberg Finance L.P.; as of 6/29/18
1 Core rate, personal consumption expenditure Dec/Dec in % (no average as for the other figures)
F refers to our forecast as of 6/21/18
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 6/29/18

Equities

Equities | Curb your enthusiasm

  Current* Jun 2019F Total Return (expexted)1

Forecast

in %

Expected earnings growth

P/E impact

Dividend yield

United States (S&P 500)

2,718

2,900

8.8

13%

-6%

2.1%

Europe (Stoxx Europe 600)

380

390

6.3

8%

-4%

3.7%

Eurozone (Euro Stoxx 50)

3,396

3,550

8.5

8%

-3%

3.9%

Germany (Dax)1

12,306

13,500

9.7

7%

0%

3.3%

United Kingdom (FTSE 100)

7,637

7,800

5.2

7%

-6%

4.3%

Switzerland (Swiss Market Index)

8,609

8,850

6.4

18%

-13%

3.6%

Japan (MSCI Japan Index)

1,025

1,080

7.7

7%

-2%

2.3%

MSCI Emerging Markets Index (USD)

1,070

1,150

10.3

11%

-3%

2.8%

MSCI AC Asia ex Japan Index (USD)

672

740

12.9

11%

-1%

2.8%

MSCI EM Latin America Index (USD)

2,477

2,500

4.0

10%

-8%

3.1%

* Sources: Bloomberg Finance L.P., FactSet Research Systems Inc.; as of 6/29/18
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 6/21/18
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 6/29/18

Fixed Income

Fixed Income | Nervous markets ahead

  Current* Jun 2019F

United States

U.S. Treasuries (10-year)

2.86%

3.25%

U.S. municipal bonds

86%

85%

U.S. investment-grade corporates

116 bp

100 bp

U.S. high-yield corporates

363 bp

370 bp

Securitized: mortgage-backed securities1

75 bp

90 bp

Europe

German Bunds (10-year)

0.30%

1.00%

UK Gilts (10-year)

1.28%

1.75%

Euro investment-grade corporates2

134 bp

95 bp

Euro high-yield corporates2

388 bp

300 bp

Securitized: covered bonds

55 bp

55 bp

Italy (10-year)2

237 bp

200 bp

Asia-Pacific

Japanese government bonds (10-year)

0.04%

0.10%

Asia credit

267 bp

255 bp

Global

Emerging-market sovereigns

370 bp

350 bp

Emerging-market credit

332 bp

330 bp

* Source: Bloomberg Finance L.P.; as of 6/29/18
1 Current-coupon spread vs. 7-year U.S. Treasuries
2 Spread over German Bunds
F refers to our forecasts as of 6/21/18; 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 6/29/18

Currencies

  Current* Jun 2019F

EUR vs. USD

1.17

1.15

USD vs. JPY

110.8

111.0

EUR vs. GBP

0.885

0.90

GBP vs. USD

1.32

1.28

USD vs. CNY

6.62

6.50

* Source: Bloomberg Finance L.P.; as of 6/29/18
F refers to our forecasts as of 6/21/18
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 6/29/18

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