As the global economy gradually heats up and the pivot towards reflation
continues, investors are advised to manage downside risks, with a preference for equities, said the Wealth Management Advisory Outlook 2018 released by Standard Chartered Bank.
With monetary stimulus having played its role in sparking economic expansion and reflation
, the focus is now shifting towards fiscal stimulus.
The dollar index, which measures the greenback against other major currencies, is seen ending about 9 percent lower in 2017 as the reflation
trade seen at the start of the year faded.
Outside of US tax legislation, there already were a bevy of factors supporting Goldman's calls for steady growth, reflation
, and monetary normalization in Asia for 2018.
The West's reflation
may very well not have been about Donald Trump at all.
So far this year, the reflation
trade has struggled due to the lack of any fiscal policy progress, a weakened dollar and a range bound 10-year U.
The aim should be to end fiscal austerity, imposed in 13 out of 14 leading advanced economies between 2011 and 2015, and prioritise reflation
, full employment and decent jobs, rather than tackling inflation and cutting government debt.
In a commentary, Citi said an 'unusually large price action ahead of the FOMC (Federal Open Market Committee statement) may signal a return of reflation
All in all, Julius Baer believe that the tightening of the labour market within a robust economic backdrop will foster a mild reflation
and allow a gradual firming of US monetary policy.
The broader concern is that a decelerating China, squeezed by tighter financial conditions, represents a double hit to the global reflation
Yet fast forward to today and the China-triggered reflation
trade for commodities is ebbing.
The apex bank said that it is expecting its stimulus measures to achieve its reflation