Recession risks remain muted

Here's what we're thinking

September 14, 2016

A variety of indicators suggest that recession risks in the next 6 to 12 months remain muted and thus support our constructive mediumterm view for global market performance. In particular, the lack of overheating pressures, solid consumer demand and labour trends along with supportive central bank policies suggest this current economic and market cycle (7 years) remains well in train. In the near-term there are a variety of event risks which could trigger profit-taking following the gains of the past six months including central bank policy meetings (ECB 9/8, U.S. Fed & Bank of Japan 9/21), OPEC summit (9/26), first U.S. presidential debate (9/26), U.S. budget deadline (9/30), and IMF meetings (10/7). Entering into a typically tricky seasonal period for markets with volatility levels at recent lows suggests opportunities could materialize in the not-too-distant future.

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