The spread of the coronavirus beyond China has opened up a new global dimension to the epidemic – and potential for a sharper economic drag from efforts to contain it. We expect the economic expansion to remain intact, albeit on a lower track. We see a sharp rebound once potential disruptions dissipate, yet the unknown depth and duration of the shock add material downside risks. As a result, we have pulled back our moderately pro-risk stance to benchmark weights.
- We see the spreading coronavirus outbreak and related containment measures causing a downshift in the global growth outlook for 2020.
- We shift our moderate pro-risk stance to a neutral position due to the many uncertainties associated with the outbreak and its impact.
- This week’s data may show weakness caused by the outbreak and we may get an early read on the Democratic US presidential candidate.
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