Preparing for another round of pent-up demand
- In our view, global activity is poised to re-accelerate in Q4 from Q3, and remain well above trend in 2022.
- Supply chain issues that are contributing to slowing growth and higher inflation will get better, not worse, as vaccinations improve public health outcomes.
- Regions such as Europe and Japan continue to have superior earnings trends and are also relative beneficiaries of rising bond yields as global central banks pare back stimulus.
- However, risks to the procyclical trade, chiefly from more persistently elevated inflation as well as China’s real estate sector, have risen in prominence.