1. Research
1. Mai 2019
Key highlights from Torsten Slok’s, Chief Economist, Monthly Chart Book detailing macro and economic drivers impacting markets today. [mehr]
Slide 1 May Economic Chart Book (Snapshot) Torsten Slok, Ph.D. Chief International Economist Managing Director 60 Wall Street New York, New York 10005 Tel: 212 250 2155 Torsten.Slok@db.com May 2019 DISCLOSURES AND ANALYST CERTIFICATIONS ARE LOCATED IN APPENDIX 1 MCI(P) 066/04/2019. Matthew Barnard Associate Director of N.A. Equity Research Managing Director 60 Wall Street New York, New York 10005 Tel: 212 - 250 - 5111 Matthew.S.Barnard@db.com Deutsche Bank Research 1 Torsten Slok, torsten.slok@db.com +1 212 250 - 2155 May 2019 May Economic Chart Book (Snapshot) Enclosed are select charts from our May Economic Chart Book discussing: • Updated global economic trends • Why the US is a 2 - 2 - 2 economy for the new two years • US GDP Outlook and risks • State of the US consumer • Policy options for the US, Europe and Japan when the next recession hits Link to Torsten Slok’s full May Economic Chart Book can be found here. Deutsche Bank Research 2 Torsten Slok, torsten.slok@db.com +1 212 250 - 2155 May 2019 For the US we expect 2% growth, 2% inflation, and near 2% Fed funds rate for the next two years. Upside risks: • US quickly completes trade deals with China and Europe • Brexit gets resolved quickly • European Parliamentary election in May with no impact on markets • German fiscal expansion Downside risks: • A sudden blowup in credit markets • The US consumer gets tired • The US trade war intensifies, in particular with Europe • Fed credibility is severely damaged • China gets a current account deficit Overview: Risks to the economic outlook Deutsche Bank Research 3 Torsten Slok, torsten.slok@db.com +1 212 250 - 2155 May 2019 US and Europe much more important for China than China is for US and Europe Source: IMF Spillover Report, DB Global Research Impact of 1% increase in China GDP Impact of 1% increase in Euro area GDP Impact of 1% increase in US GDP Deutsche Bank Research 4 Torsten Slok, torsten.slok@db.com +1 212 250 - 2155 May 2019 Consensus expectations Source: Bloomberg Finance LP, DB Global Research Consensus expects: 2% growth, 2% inflation, and Fed funds at 2.5% Deutsche Bank Research 5 Torsten Slok, torsten.slok@db.com +1 212 250 - 2155 May 2019 Capacity utilization has peaked Source: FRB, Haver Analytics, DB Global Research Deutsche Bank Research 6 Torsten Slok, torsten.slok@db.com +1 212 250 - 2155 May 2019 ISM and Markit PMI point to some downside risks to growth Source: ISM, IHSM, Haver Analytics, DB Global Research Deutsche Bank Research 7 Torsten Slok, torsten.slok@db.com +1 212 250 - 2155 May 2019 Credit card interest rate at highest level in decades Source: Federal Reserve Board, Haver Analytics, DB Global Research Commercial bank interest rate: credit cards, accounts assessed interest 11 12 13 14 15 16 17 959801040710131619 % 11 12 13 14 15 16 17 % Note: This rate is the annualized ratio of total finance charges at all reporting banks to the total average daily balances a gai nst which the finance charges were assessed Last observation 2019 Q1 Deutsche Bank Research 8 Torsten Slok, torsten.slok@db.com +1 212 250 - 2155 May 2019 Is the US expansion fizzling out? Source: BEA, Haver Analytics, DB Global Research Deutsche Bank Research 9 Torsten Slok, torsten.slok@db.com +1 212 250 - 2155 May 2019 The credit cycle is leading the economic cycle. Economic slowdown risk is rising Source: BLS, ABA, Haver Analytics, DB Global Research 2 4 6 8 10 12 657075808590950005101520 % 1.2 1.6 2.0 2.4 2.8 3.2 3.6 % Unemployment rate (ls) Delinquency rate on consumer loans (rs, 12m lead) Note: Composite consumer loans consists of eight loan types: personal, automobile direct & indirect, mobile homes, recreational vehicles, marine financing loans, property improvement and home equity and second mortgage loans. 4 years 5 years 1 year ? Deutsche Bank Research 10 Torsten Slok, torsten.slok@db.com +1 212 250 - 2155 May 2019 United States: Monetary policy:Rate cuts, forward guidance, average inflation targeting, QE, yield curve control, and CCyB. Negative interest rates unlikely, changing inflation target unlikely. Fiscal policy:Automatic stabilizers, active countercyclical policies, infrastructure spending Europe: Monetary policy: Forward guidance, TLTRO, credit easing, depo tiering, QE, increase the 33% issuer-limit, add more asset classes to the eligible QE list. Fiscal policy: Automatic stabilizers, German fiscal stimulus package, Italian structural reforms, complete banking union and capital markets union, more fiscal risk sharing. Japan: Monetary policy: Rate cuts, forward guidance, lower 10y yield target, increase ETF purchase volume, increase JGB purchase volume, purchas other assets such as mortgages or munis. Impact of these initiatives would likely be minimal. TLTRO expected to harm bank earnings. Fiscal policy: Postpone October’s consumption tax hike, increase infrastructure spending Overview: Policy options for US, Europe, and Japan when the next recession hits Deutsche Bank Research 11 Torsten Slok, torsten.slok@db.com +1 212 250 - 2155 May 2019 Torsten Slok, Ph.D. • Chief International Economist, Managing Director • Deutsche Bank Securities, Inc.  Torsten Slok joined Deutsche Bank Securities in the fall of 2005.  Mr. Slok’s Economics team has been top - ranked by Institutional Investor in fixed income and equities since 2010. Slok currently serves as a member of the Economic Club of New York  Prior to joining the firm, Mr. Slok worked at the OECD in Paris in the Money and Finance Division and the Structural Policy Analysis Division. Before joining the OECD he worked for four years at the IMF in the Division responsible for writing the World Economic Outlook and the Division responsible for China, Hong Kong, and Mongolia.  Mr. Slok studied at University of Copenhagen and Princeton University. He has published numerous journal articles and reviews on economics and policy analysis, including in Journal of International Economics, Journal of International Money and Finance, and The Econometric Journal. Deutsche Bank Research 12 Torsten Slok, torsten.slok@db.com +1 212 250 - 2155 May 2019 01/05/2019 18:49:51 2010 DB Blue template Appendix 1 Important Disclosures *Other Information Available upon Request Analyst Certification The views expressed in this report accurately reflect the personal views of the undersigned lead analyst about the subject issuers and the securities of those issuers. 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