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Is China shaping a new three-year global upturn cycle?

 

The essential

 

We believe that a longer-than-expected Chinese economic stabilisation from 2016 to 2018 is helping to shape an upturn in the global cycle, which is much longer and also stronger than expected. This upturn in the global cycle clearly benefits global cyclical sectors, commodities and emerging markets. We believe that those are the trades that worked in 2016 and will continue to work in 2017 and 2018.

 

PPI recovery in China implies real interest rates’ going to negative, continuous upward earnings revision, and declining NPL ratios, which are hugely positive. And positive surprises in China from strong private capex expansion, public capex expansion and property inventory destocking are not yet
priced in by the market, this also provides a window to enter the market to participate in trades involving cyclical sectors, commodities and emerging markets.

CROSS ASSET (Download)

Flag-UK
March 2017

Flag-FR
Mars 2017

The Article

L'Article

Mo JI, Amundi Hong Kong Chief Economist
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Is China shaping a new three-year global upturn cycle?
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