Politics

DZ BANK Research Outlook for 2017

Fiscal policy will stimulate the global economy, but growth will remain fragile / central banks not more expansionary / stock markets with moderate upside potential The global economy will only slowly pick up pace in 2017. It will be bolstered by increasing fiscal-policy stimuli. Inflation will edge up above all owing to the energy-price-related baseline effect. Thus, there will be no talk of an even more expansionary monetary policy. Interest rates will remain very low, especially in the Eurozone. The existing lack of appealing investment opportunities in combination with the global economy’s slightly brisker growth will also boost the stock markets. The DAX should close 2017 at around 12,000 points. The global economy is estimated to grow by 3.0 percent in the coming year, whilst 2.8 percent is expected in the current year. Growth worldwide continues to not be very dynamic. Some countries will try and use fiscal programmes to…

Do we have to worry about Trump

Contrary to all expectations Donald Trump won the election. In January he will become the 45th US President. It’s obvious: Trump is different from his predecessor and he will certainly also govern differently But there is mounting concern that Trump will plunge not only the USA but also the western world into major problems. But do we really need to be worried? Donald Trump did not get the most votes. But this is not necessary in the USA. Because of the electoral system the candidate that gets the most electoral votes is the winner. And here Trump has a huge lead. If the Michigan result, which is still not yet final, is confirmed, then Trump won the votes of 306 of the electoral-college members, while Hillary Clinton won only 232. A victory that not all Americans are enthusiastic about: since the election there have been demonstrations against the future president…

Japanese growth surprisingly positive in the third quarter – thanks to exports

The Japanese economy was surprisingly positive in the third quarter: gross domestic product increased by 0.5 percent (quarter-on-quarter) after 0.2 percent in the second quarter. This means the economy was more robust than expected and equated to an annualised expansion rate of +2.2 percent (Q2: +0.7% Q/Q, annualised). Since the middle of the year, the economy has been driven mainly by exports, which rose by 2 percent (quarter-on-quarter), with exports of components for smartphones and other electrical articles having a particularly positive impact. Private consumption on the other hand just about managed a slight increase with growth of only +0.1 percent. Corporate investment did little more than stagnate, increasing by +0.1 percent over the second quarter. All in all, Japan’s economy was therefore very susceptible recently to the eventful external factors. While the demand for exports in the third quarter alone contributed 0.5 percentage points to economic growth, thanks to…

The new US President-elect – Trump, his plans and what’s likely to become of them

In the US election, Donald Trump has won 290 of the electoral votes, with „only“ 270 actually required for a victory. This will make him the 45th President of the United States and he will move into the White House on 20th January. The result of what was an altogether very exciting and often highly-personal election campaign confirms the rule that the end of a president’s eight-year period of office is usually followed by political change. And this time too, the party that lost the election was the former President’s party. The majority of voters therefore preferred to place their trust in the Republican candidate and his assurance to achieve stronger economic growth as well as higher wage growth. It therefore comes as no surprise to learn that the Republican Party continues to have the majority of mandates in the two chambers of the Congress. Backed by the full majority…

Referendum to decide on Italy’s political future

On 4th December, Italy is to stage a constitutional referendum on the reform of the senate that would radically shake up the country’s political system. The voting will not only decide the future of the present government in the short term but will also have major significance for the functioning of the political system in the long term. Based on current opinion polls, the opponents of the constitutional reform have gained considerable uplift in recent months and have now overtaken the reform supporters. But around one third of Italians are still undecided. The reasons for the critical position of the reform opponents lie in the fact that many members of the public understand the referendum primarily as a vote against the government. As part of their political strategy, the opposition is attempting to use the referendum as an occasion to topple the government or at least greatly weaken it. Considering…

Growing uncertainty for US Presidential Election

The upcoming US presidential election has stirred up some unease on financial markets over the past few days. This was triggered by the falling opinion poll scores for the Democratic candidate Hillary Clinton. These have recently deteriorated again significantly from the state of play not too far back when polls showed a lead that suggested a relatively sure chance of victory. The election takes place on 8 November and the denigration of the opponents by ever more revelations has recently picked up considerable momentum again. True to the motto “voters have a short memory” it is no coincidence that damaging information is only now coming to light, virtually on the finishing straight to the election date. We continue to expect that Hillary Clinton will be the next president of the USA. The outcome of next Tuesday’s presidential and Congressional elections will probably not have any influence in the short term…

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