Macroeconomic & Geopolitical

The Art of the (Trade) Deal

February 2020 – 4 min read
A wave of optimism surrounds trade deals poised to take place, including agreements between the U.S. and India as well as the U.K. and the EU, China’s government continues reacting to the coronavirus, and keep an eye on inflation data for the U.S. and Asia Pacific due next week.

Watch List

Arrows indicate consensus forecast compared to the previous period.


  • U.S. inflation is expected to remain subdued in January. Weak import prices—which do not include tariffs—should continue to keep a lid on the CPI. Low inflation should keep the FOMC from raising rates this year as they maintain an easing bias.
  • The JOLTs report is worth monitoring, as job openings slid more than expected in November, and we look to see if weakness persists, or if they tick higher to be more in line with other positive labor market data.


  • German preliminary Q4 GDP is expected to contribute modestly to EZ GDP growth. While sentiment data in Germany points to growth in the fourth quarter, hard data, such as PMIs, suggest manufacturing was a drag on growth.
  • U.K. GDP will likely remain weak in the 4Q19, as uncertainties surrounding the election suppressed economic activity. However, GDP should recover in 2020 as activity bounces back following the election and is aided by fiscal stimulus in April.

Asia Pacific

  • Inflation in China is likely to remain subdued. Impacts from the outbreak of the coronavirus has already led to fiscal stimulus and increased liquidity. The PBOC will likely be even more accommodative, and odds are rising for a cut in both the Loan Prime Rate and Reserve Requirement Ratios, as they try to cushion the economy.

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Christopher Smart, PhD, CFA

Chief Global Strategist & Head of the Barings Investment Institute

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