New growth realities Embracing "kairos" - August 2020 - Deutsche Bank Wealth Management
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New growth realities
Embracing “kairos”
August 2020
Chief Investment Office International Private Bank &
Government & Regulatory Advocacy
In Europe, Middle East and Africa as well as in Asia Pacific this material is considered marketing material, but this is not the case in the U.S. No assurance can be given that any forecast or target can be achieved. 1
Forecasts are based on assumptions, estimates, opinions and hypothetical models which may prove to be incorrect. Past performance is not indicative of future returns. Investments come with risk. The value of an
investment can fall as well as rise and you might not get back the amount originally invested at any point in time. Your capital may be at risk.
Executive summary COVID-19 and associated lockdowns have hit the global economy hard. Attention is now shifting to economic recovery and what it will mean. The crisis has demonstrated that new growth realities will be determined not only by economic and financial issues, but also by social and political needs. This is indeed an opportune moment for change – what the ancient Greeks called “kairos”. This report looks first at the measurable impact of COVID-19 on global economies. We then look at how the crisis has accelerated implementation of pre-existing trends in trade, digitalization and the future of work, and at the increasing importance of ESG. Finally, we identify policy implications and the key economic and political dimensions that will define our future world. Source: Deutsche Bank AG. In Europe, Middle East and Africa as well as in Asia Pacific this material is considered marketing material, but this is not the case in the U.S. No assurance can be given that any forecast or target can be achieved. 2 Forecasts are based on assumptions, estimates, opinions and hypothetical models which may prove to be incorrect. Past performance is not indicative of future returns. Investments come with risk. The value of an investment can fall as well as rise and you might not get back the amount originally invested at any point in time. Your capital may be at risk.
01 02
The idea Impact on
of kairos economy & markets
03 04 05
Future of ESG and Policy
work & trade conservation implications
In Europe, Middle East and Africa as well as in Asia Pacific this material is considered marketing material, but this is not the case in the U.S. No assurance can be given that any forecast or target can be achieved. 3
Forecasts are based on assumptions, estimates, opinions and hypothetical models which may prove to be incorrect. Past performance is not indicative of future returns. Investments come with risk. The value of an
investment can fall as well as rise and you might not get back the amount originally invested at any point in time. Your capital may be at risk.
01 02
Impact on
economy & markets
The idea
of kairos
03 04 05
Future of ESG and Policy
work & trade conservation implications
In Europe, Middle East and Africa as well as in Asia Pacific this material is considered marketing material, but this is not the case in the U.S. No assurance can be given that any forecast or target can be achieved. 4
Forecasts are based on assumptions, estimates, opinions and hypothetical models which may prove to be incorrect. Past performance is not indicative of future returns. Investments come with risk. The value of an
investment can fall as well as rise and you might not get back the amount originally invested at any point in time. Your capital may be at risk.
Is it time for change?
The needs of the global
economy provide a moment
of “kairos” to take policy
change further
kairos = A moment where things could change substantially
Source: Deutsche Bank AG.
In Europe, Middle East and Africa as well as in Asia Pacific this material is considered marketing material, but this is not the case in the U.S. No assurance can be given that any forecast or target can be achieved. 5
Forecasts are based on assumptions, estimates, opinions and hypothetical models which may prove to be incorrect. Past performance is not indicative of future returns. Investments come with risk. The value of an
investment can fall as well as rise and you might not get back the amount originally invested at any point in time. Your capital may be at risk.
What is today’s new reality?
• COVID-19 has forced major changes to how we live and work, and has posed
questions about how societies should operate in the future.
• Looking at financial markets, the post-coronavirus world is likely to be
characterized by lower yields for even longer, despite higher borrowing.
• At a corporate level, those sectors best able to adapt will fare better and we are
likely to see failures elsewhere. Corporate earnings have already fallen sharply.
• Substantial and long lasting changes in consumer demand and work dynamics are
likely to benefit sectors such as IT and healthcare.
• Following long-term investment themes may help navigate this difficult landscape.
Source: Deutsche Bank AG.
In Europe, Middle East and Africa as well as in Asia Pacific this material is considered marketing material, but this is not the case in the U.S. No assurance can be given that any forecast or target can be achieved. 6
Forecasts are based on assumptions, estimates, opinions and hypothetical models which may prove to be incorrect. Past performance is not indicative of future returns. Investments come with risk. The value of an
investment can fall as well as rise and you might not get back the amount originally invested at any point in time. Your capital may be at risk.
01 02
The idea
of kairos
Impact on economy
& markets
03 04 05
Future of ESG and Policy
work & trade conservation implications
In Europe, Middle East and Africa as well as in Asia Pacific this material is considered marketing material, but this is not the case in the U.S. No assurance can be given that any forecast or target can be achieved. 7
Forecasts are based on assumptions, estimates, opinions and hypothetical models which may prove to be incorrect. Past performance is not indicative of future returns. Investments come with risk. The value of an
investment can fall as well as rise and you might not get back the amount originally invested at any point in time. Your capital may be at risk.
Global growth and inflation outlook
(YoY %)
WESTERN Germany China EASTERN
HEMISPHERE 2020 F 2021 F 2020 F 2021 F
HEMISPHERE
-6.0 4.5 1.0 9.0
-0.2 1.2 2.8 1.8
U.S.A. Eurozone Japan
2020 F 2021 F
2020 F 2021 F 2020 F 2021 F
-5.7 5.6
-7.5 4.5 -5.5 3.3
1.2 2.1
-0.3 1.0 -0.3 0.1
Source: Deutsche Bank AG. Forecasts as of May 28, 2020.
In Europe, Middle East and Africa as well as in Asia Pacific this material is considered marketing material, but this is not the case in the U.S. No assurance can be given that any forecast or target can be achieved. 8
Forecasts are based on assumptions, estimates, opinions and hypothetical models which may prove to be incorrect. Past performance is not indicative of future returns. Investments come with risk. The value of an
investment can fall as well as rise and you might not get back the amount originally invested at any point in time. Your capital may be at risk.
Growth disparities between countries
GDP growth, % YoY annualized
10%
Low growth
• The U.S. economy is experiencing a sharp
5% recession from the lockdown effects despite the
unprecedented fiscal and monetary response.
We do not expect U.S. GDP to return to pre-
0% crisis levels until 2022.
• In the Eurozone, economic lockdowns should
lead to a cut in major economies’ annual GDP
-5% growth of between -6% and -10% YoY for 2020.
We expect Eurozone GDP to contract by -7.5%
YoY in 2020, and increase by +4.5% in 2021.
-10% Increased debt levels pose the risk of another
Eurozone debt crisis over the longer term.
• We expect the UK economy to contract by -8%
-15% YoY in 2020 and to rebound to +6.5% YoY in
2021.
• Japan has experienced a relatively muted virus
-20% outbreak, which should lead to a less dramatic
U.S. Eurozone UK Japan China (but still severe) hit to its economy than other
DM countries.
Q3 2019 Q4 2019 Q1 2020 Q2 2020
• China’s Q2 GDP turned positive at +3.2% YoY, a
sharp turnaround from Q1 and higher than
Footnotes: Q2 2020 GDP growth for UK and Japan are Bloomberg Finance L.P consensus estimates. consensus.
Forecasts as of May 28, 2020. Source: Deutsche Bank AG. Data as of August 5, 2020.
In Europe, Middle East and Africa as well as in Asia Pacific this material is considered marketing material, but this is not the case in the U.S. No assurance can be given that any forecast or target can be achieved. 9
Forecasts are based on assumptions, estimates, opinions and hypothetical models which may prove to be incorrect. Past performance is not indicative of future returns. Investments come with risk. The value of an
investment can fall as well as rise and you might not get back the amount originally invested at any point in time. Your capital may be at risk.
How may GDP growth develop?
Recovery scenario, GDP trend
Illustrative example Implications
Restrictions
2-3 months of restrictions & lifted over
following 3-6 months. Further local lockdowns
possible.
Macro
Global recession, stabilization end 2020,
recovery expected in 2021.
2017 2018 2019 2020 2021 2022
Labour market
Real GDP Pre-Corona Trend Real GDP forecast Programmes against unemployment likely to
support consumption.
Source: Deutsche Bank AG. Data as of July 2020.
In Europe, Middle East and Africa as well as in Asia Pacific this material is considered marketing material, but this is not the case in the U.S. No assurance can be given that any forecast or target can be achieved. 10
Forecasts are based on assumptions, estimates, opinions and hypothetical models which may prove to be incorrect. Past performance is not indicative of future returns. Investments come with risk. The value of an
investment can fall as well as rise and you might not get back the amount originally invested at any point in time. Your capital may be at risk.What a typical recession looks like
Shift in quantity & prices
Supply and demand – typical recession
120
Illustrative example Dynamics
110
DEMAND
• Savings rate increases, consumption
100
decreases as people are afraid of losing
their jobs
90
• Demand curve shifts to the left
80
SUPPLY
Price
• Producers lower prices to sell goods
70
New equilibrium EQUILIBRIUM
60
• Lower quantity at lower prices
50
IMPLICATIONS
• Central banks cut interest rates to make
40
saving less attractive. Fiscal policy steps
in to strengthen aggregate demand
30
50 60 70 80 90 100 110 120 130 140 150
Quantity
Demand Supply Demand Recession
Source: Deutsche Bank AG, DWS Investment GmbH. Data as of July 2020.
In Europe, Middle East and Africa as well as in Asia Pacific this material is considered marketing material, but this is not the case in the U.S. No assurance can be given that any forecast or target can be achieved. 11
Forecasts are based on assumptions, estimates, opinions and hypothetical models which may prove to be incorrect. Past performance is not indicative of future returns. Investments come with risk. The value of an
investment can fall as well as rise and you might not get back the amount originally invested at any point in time. Your capital may be at risk.What the current recession looks like
Deflationary in the short term
Supply and demand – COVID-19 recession
120 Dynamics
Illustrative example
110
DEMAND
100 • Savings rate increases, consumption
decreases as people are afraid of losing
90 their jobs
• Demand curve shifts to the left
80
Price
SUPPLY
New
70 • Capacity is cut massively (fewer people in
equilibrium
planes, trains, restaurants, etc.)
60 • Supply curve shifts to the left
50
EQUILIBRIUM
• Big drop in quantity at (slightly) lower
40
prices
30
50 60 70 80 90 100 110 120 130 140 150 IMPLICATIONS
• Monetary as well as fiscal stimulus mainly
Quantity
focused on the supply side
Demand Covid-19 Recession Demand
Supply Covid-19 Supply
Source: Deutsche Bank AG, DWS Investment GmbH. Data as of July 2020.
In Europe, Middle East and Africa as well as in Asia Pacific this material is considered marketing material, but this is not the case in the U.S. No assurance can be given that any forecast or target can be achieved. 12
Forecasts are based on assumptions, estimates, opinions and hypothetical models which may prove to be incorrect. Past performance is not indicative of future returns. Investments come with risk. The value of an
investment can fall as well as rise and you might not get back the amount originally invested at any point in time. Your capital may be at risk.Asian economies: mixed PMI recovery
Manufacturing PMIs
60
Asia
55 • The regional economy is seen shrinking this
year, due to the impact of domestic
50 containment measures and lockdowns abroad
hitting exports and tourism.
• Tourism and trade as main income sources
45 most affected – tourism even after reopening
expected to decrease by 50-70%.
40 • Downside risks include a second wave and
prolonged weak external demand.
35 Russia
30 • With the introduction of lockdown measures,
Russia slipped into a recession, affected by
domestic demand shocks against a backdrop
25
of already weak external demand. PMI
May-19 Jul-19 Sep-19 Nov-19 Jan-20 Mar-20 May-20 Jul-20
indexes fell to a record low.
India China South Korea • We expect GDP growth in Russia to be -4% in
Taiwan Singapore Vietnam 2020 and rebound to +3.5% in 2021.
Malaysia Indonesia Russia
Source: World Bank, Bloomberg Finance L.P, Deutsche Bank AG. Data as of August 3, 2020.
In Europe, Middle East and Africa as well as in Asia Pacific this material is considered marketing material, but this is not the case in the U.S. No assurance can be given that any forecast or target can be achieved. 13
Forecasts are based on assumptions, estimates, opinions and hypothetical models which may prove to be incorrect. Past performance is not indicative of future returns. Investments come with risk. The value of an
investment can fall as well as rise and you might not get back the amount originally invested at any point in time. Your capital may be at risk.LatAm and Africa structural struggles
Real annual GDP and forecasts (YoY)
6% Latin America
4% • The pandemic will push the region to its worst
economic contraction in over a century.
• The impact on growth will be through
2%
disruption of value chains and collapse in
commodity prices, and the sudden stop in
0% production and activity domestically.
• Limited fiscal capacity to counter the effects
-2% of the crisis clouds the outlook further and will
limit the expected rebound in 2021.
-4% • High poverty, inequality and informal workers
pose vulnerabilities to economies.
-6%
Africa
-8% • Infections and deaths are rather low but
economies are vulnerable due to external
shocks (subdued commodity prices, looming
food crisis and volatility in financial markets).
• Continuing gradual easing of restrictions and
FY2019 FY2020 e FY2021 e coordination with development partners
assists economic recovery.
Source: Bloomberg Finance L.P, Deutsche Bank AG. Data as of July 2020.
In Europe, Middle East and Africa as well as in Asia Pacific this material is considered marketing material, but this is not the case in the U.S. No assurance can be given that any forecast or target can be achieved. 14
Forecasts are based on assumptions, estimates, opinions and hypothetical models which may prove to be incorrect. Past performance is not indicative of future returns. Investments come with risk. The value of an
investment can fall as well as rise and you might not get back the amount originally invested at any point in time. Your capital may be at risk.Magnifying pre-existing uncertainty
World Uncertainty Index (GDP weighted average)
450
Coronavirus COVID-19 has accelerated pre-existing trends
400 as captured by the World Uncertainty Index. It
examines uncertainty related to economic and
U.S.-China trade tensions, and Brexit political events since 1960. The trend was
350
already increasing pre-COVID-19, and in
U.S. presidential elections
March 2020 it skyrocketed.
300 Sovereign debt crisis in Europe Brexit
Iraq war and outbreak of SARS
250
Financial
U.S. recession and 9/11 credit
200
crunch
150
100
50
0
Q2 Q4 Q2 Q4 Q2 Q4 Q2 Q4 Q2 Q4
1960 1966 1973 1979 1986 1992 1999 2005 2012 2018
Source: Datastream, IMF Deutsche Bank AG. Data as of July 2020.
In Europe, Middle East and Africa as well as in Asia Pacific this material is considered marketing material, but this is not the case in the U.S. No assurance can be given that any forecast or target can be achieved. 15
Forecasts are based on assumptions, estimates, opinions and hypothetical models which may prove to be incorrect. Past performance is not indicative of future returns. Investments come with risk. The value of an
investment can fall as well as rise and you might not get back the amount originally invested at any point in time. Your capital may be at risk.Balancing risks and supports
Risks Supports
COVID-19: COVID-19:
• Second wave of infections • Vaccine may be available soon
• Different strains • Therapies help treatment of illness
• Another round of lockdowns
Economy:
Economy: • Fiscal and monetary stimulus
• Fiscal fatigue • Thematic and corporate winners, such
• Monetary ineffectiveness as ESG, Healthcare & Tech companies
• Long term changes in consumption behaviour
Source: Deutsche Bank AG. Data as of end June, 2020.
In Europe, Middle East and Africa as well as in Asia Pacific this material is considered marketing material, but this is not the case in the U.S. No assurance can be given that any forecast or target can be achieved. 16
Forecasts are based on assumptions, estimates, opinions and hypothetical models which may prove to be incorrect. Past performance is not indicative of future returns. Investments come with risk. The value of an
investment can fall as well as rise and you might not get back the amount originally invested at any point in time. Your capital may be at risk.Eurozone joblessness to pick up
Eurozone unemployment rate and wage growth
13% 4%
Eurozone unemployment rate vs. wage growth
12% 4%
In times of low unemployment, employees have
a higher bargaining power, which results in
11% 3% higher wages.
10% 3% Economic downturns and deteriorating labour
markets have the effect that in the medium
9% 2% term the pace of wage growth decelerates.
Therefore, there is a negative correlation
between unemployment rates and wage growth.
8% 2%
As the recovery of the Eurozone unemployment
7% 1% situation is likely to stay sluggish, the wage
growth rate is following the relationship
6% 1% described above. We expect this to stay muted
in the coming months.
5% 0%
2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020
Eurozone unemployment rate (lhs)
Eurozone wage growth (YoY, rhs)
Source: Deutsche Bank AG, Datastream. Data as of July 27, 2020.
In Europe, Middle East and Africa as well as in Asia Pacific this material is considered marketing material, but this is not the case in the U.S. No assurance can be given that any forecast or target can be achieved. 17
Forecasts are based on assumptions, estimates, opinions and hypothetical models which may prove to be incorrect. Past performance is not indicative of future returns. Investments come with risk. The value of an
investment can fall as well as rise and you might not get back the amount originally invested at any point in time. Your capital may be at risk.U.S. labour market deterioration
U.S. unemployment rate and wage growth
16% 9%
U.S. unemployment rate vs. wage growth
14% 8%
The situation in the U.S. differs from the one in
7% the Eurozone, as we observe a positive trend for
12% both unemployment rate and wage growth.
6%
10% Due to the pandemic, many workers were laid
5% off in a very short period of time, particularly in
8% low-paid sectors such as leisure and retail, which
4% were the hardest hit by the lockdowns. The
layoffs were much higher than in the Eurozone,
6%
3% explained by the U.S. labour market being less
rigid overall. Therefore, despite the overall
4% increase in unemployment, average hourly
2%
earnings surged as a large share of low income
2% 1% workers were out of the workforce.
0% 0%
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
U.S. Unemployment Rate (U-3, lhs)
U.S. Wage Growth (YoY, rhs)
Source: Deutsche Bank AG, FactSet. Data as of July 24, 2020.
In Europe, Middle East and Africa as well as in Asia Pacific this material is considered marketing material, but this is not the case in the U.S. No assurance can be given that any forecast or target can be achieved. 18
Forecasts are based on assumptions, estimates, opinions and hypothetical models which may prove to be incorrect. Past performance is not indicative of future returns. Investments come with risk. The value of an
investment can fall as well as rise and you might not get back the amount originally invested at any point in time. Your capital may be at risk.Recovery confidence greatest in China
Share of adults who are confident in their country's economic recovery from COVID-19 in 2020
120%
100% 4%
13%
16%
25%
30%
80% 39% 36%
41%
44%
60% 48%
63%
59%
40% 59%
47% 51% 54%
52%
20%
35%
24%
17%
12% 10% 10% 12%
0%
Spain France Italy Portugal UK Germany U.S. China
Optimistic Unsure Pessimistic
Source: Statista, Deutsche Bank AG. Data as of July, 2020.
In Europe, Middle East and Africa as well as in Asia Pacific this material is considered marketing material, but this is not the case in the U.S. No assurance can be given that any forecast or target can be achieved. 19
Forecasts are based on assumptions, estimates, opinions and hypothetical models which may prove to be incorrect. Past performance is not indicative of future returns. Investments come with risk. The value of an
investment can fall as well as rise and you might not get back the amount originally invested at any point in time. Your capital may be at risk.Higher debt is unavoidable
Continuing the stimulus comes at a big cost. Governments of wealthy nations have launched stimulus programs, with a
significant portion either subsidizing work or compensating people who lose it. Before the year end, government deficits in
these countries will likely be in double digits.
Fiscal balance, % of GDP Government debt, % of GDP
5
180
160
0
140
120
-5
100
80
-10
60
-15 40
20
-20 0
2019 2020 e 2021 e 2019 2020 e 2021 e
Footnotes: 2020 and 2021 are OECD forecasts.
Source: OEC, Deutsche Bank AG. Data as of July, 2020.
In Europe, Middle East and Africa as well as in Asia Pacific this material is considered marketing material, but this is not the case in the U.S. No assurance can be given that any forecast or target can be achieved. 20
Forecasts are based on assumptions, estimates, opinions and hypothetical models which may prove to be incorrect. Past performance is not indicative of future returns. Investments come with risk. The value of an
investment can fall as well as rise and you might not get back the amount originally invested at any point in time. Your capital may be at risk.Central banks and the crisis
How have central banks supported their economies?
Monetary
policies EU NOR SWE CHE GBR U.S. AUS HKG JPN KOR SGP CHN IND BRA MEX RUS TUR
Promotes stable
economic growth
through control of
the money supply
Policy rate
cuts
Central bank
liquidity support
Central bank
swap lines
Central bank asset
purchase schemes
Eurozone Europe North America Asia Emerging Markets
Source: The Visual Capitalist, Deutsche Bank AG. Data as of July 2020.
In Europe, Middle East and Africa as well as in Asia Pacific this material is considered marketing material, but this is not the case in the U.S. No assurance can be given that any forecast or target can be achieved. 21
Forecasts are based on assumptions, estimates, opinions and hypothetical models which may prove to be incorrect. Past performance is not indicative of future returns. Investments come with risk. The value of an
investment can fall as well as rise and you might not get back the amount originally invested at any point in time. Your capital may be at risk.QE at record high this year
Market expectations of total
global QE in 2020
= $6 trillion
Equivalent to the combined GDP of India, UK and Mexico
Source: Bloomberg Finance L.P, Deutsche Bank AG. Data as of July 2020.
In Europe, Middle East and Africa as well as in Asia Pacific this material is considered marketing material, but this is not the case in the U.S. No assurance can be given that any forecast or target can be achieved. 22
Forecasts are based on assumptions, estimates, opinions and hypothetical models which may prove to be incorrect. Past performance is not indicative of future returns. Investments come with risk. The value of an
investment can fall as well as rise and you might not get back the amount originally invested at any point in time. Your capital may be at risk.Keeping inflation under control
Bank of England historical CPI data
60
A demand and supply shock
50
Since the abandonment of the gold standard
40 early in the 20th century we have been living in
an inflationary world, although inflation has
30
generally been kept well under control in this
20 century.
10 Central banks aim for constantly low inflation
rates over time, which is why they also focus on
0 market-implied inflation expectations, which fell
sharply at the start of the COVID-19 crisis.
-10
-20
The external shock of COVID-19 has heavily
impacted the global economy on both the
-30 supply and demand side.
-40
*Please watch inflation in a global context!*
1210
1271
1332
1393
1454
1516
1576
1637
1698
1759
1820
1882
1941
2002
Annual inflation rate in the UK 1210-2019 (%)
Source: Bank of England, Deutsche Bank AG. Data as July, 2020.
In Europe, Middle East and Africa as well as in Asia Pacific this material is considered marketing material, but this is not the case in the U.S. No assurance can be given that any forecast or target can be achieved. 23
Forecasts are based on assumptions, estimates, opinions and hypothetical models which may prove to be incorrect. Past performance is not indicative of future returns. Investments come with risk. The value of an
investment can fall as well as rise and you might not get back the amount originally invested at any point in time. Your capital may be at risk.Declining core inflation globally
Core consumer price inflation (YoY)
4%
The challenges ahead
3% Short term – disinflationary trends
We expect inflation to remain under downwards
pressure from depressed demand, and
2% continuing unemployment is likely to weigh on
any consumer price increase in the short term.
Some government policy initiatives may also
1% directly depress inflation temporarily. One
example would be the German decision to
reduce VAT rates (and thus prices) to encourage
0%
consumption.
-1% Long term – inflationary trends
We do not foresee sharp increases in overall
rates of inflation. But prices could rise in some
-2% economic sectors due to monetary policy
2010 2013 2016 2019 support, a recovery in demand, higher taxes and
the impact of de-globalization.
• Advantages: lower unemployment, fall in
U.S. Core CPI (YoY) Eurozone Core CPI (YoY)
national debts, more politically popular
Japan Core CPI (YoY) UK Core CPI (YoY) • Disadvantages: higher inflation would imply a
China Core CPI (YoY) retreat in globalization due to less offshoring
Source: Deutsche Bank AG, Datastream; Data as of July 27, 2020. of production
In Europe, Middle East and Africa as well as in Asia Pacific this material is considered marketing material, but this is not the case in the U.S. No assurance can be given that any forecast or target can be achieved. 24
Forecasts are based on assumptions, estimates, opinions and hypothetical models which may prove to be incorrect. Past performance is not indicative of future returns. Investments come with risk. The value of an
investment can fall as well as rise and you might not get back the amount originally invested at any point in time. Your capital may be at risk.Positive yields require risk acceptance
Lower yields for even longer
6% 10 Lower yields for even longer
5.6%
8.8
9 For Treasury yields, heavy supply should be
5% 4.6% met with strong demand as cautious market
8
4.2% 4.3% sentiment continues to provide pricing support.
7
4%
6 In global IG Credit, spreads have moved
5.4 significantly down from their recent highs but
3% 5 are still offering value. Sobering economic data
4.8
5.0 will be offset by dovish central bank policies
3.9 4
1.9% and sizable asset purchases.
2% 3.9
3.7 3.6 3
However, the likely continued increase in
0.8% 2
1% supply could make the technical backdrop less
0.3% 1 constructive. In HY, current spreads are likely
to compensate for any energy-related concerns
0% 0
JPM GBI JPM GBI iBoxx Euro Bloomberg iBoxx EUR iBoxx EUR JPM GBI- Bloomberg in the near term.
Euro 1-10Y US 1-10Y Corporates Barclays HY Main Liquid High EM Barclays
U.S. Crossover Yield Index Composite U.S.
Corporate Corporate
Investment High Yield
Grade
Yield (lhs) Duration in years (rhs)
Source: Bloomberg Finance L.P, Deutsche Bank AG. Data as July 27, 2020.
In Europe, Middle East and Africa as well as in Asia Pacific this material is considered marketing material, but this is not the case in the U.S. No assurance can be given that any forecast or target can be achieved. 25
Forecasts are based on assumptions, estimates, opinions and hypothetical models which may prove to be incorrect. Past performance is not indicative of future returns. Investments come with risk. The value of an
investment can fall as well as rise and you might not get back the amount originally invested at any point in time. Your capital may be at risk.Recovery in earnings to come in 2021
S&P 500 EPS (cons. exp., DB estimates in orange) Quarterly earnings by S&P 500 sectors
4.9%
$200 $189.55 UT 6.9%
2.4%
HC 2.0%
$162.28
$167 -0.5%
$160 IT 0.8%
$150 -8.8%
RE 3.2%
$125.44
-9.6%
$120 CS -0.3%
$110 -23.0%
COMS -2.5%
-32.1%
MA -11.8%
$80
-35.7%
Index -13.6%
-53.0%
FN -13.9%
$40 -79.2%
IN -36.1%
-86.1%
CD -38.4%
$0 -165.5%
EN -100.7%
-200% -150% -100% -50% 0% 50%
S&P 500 EPS - historical numbers and consensus forecasts Q2 2020 blended EPS growth - S&P 500
Our S&P 500 EPS forecasts Q2 2020 blended EPS growth - S&P 500 (as of Jul 31)
Source: Deutsche Bank AG, Bloomberg Finance L.P. Data as of July 20 (left chart) and July 31 (right chart), 2020.
In Europe, Middle East and Africa as well as in Asia Pacific this material is considered marketing material, but this is not the case in the U.S. No assurance can be given that any forecast or target can be achieved. 26
Forecasts are based on assumptions, estimates, opinions and hypothetical models which may prove to be incorrect. Past performance is not indicative of future returns. Investments come with risk. The value of an
investment can fall as well as rise and you might not get back the amount originally invested at any point in time. Your capital may be at risk.Keep growth bias, selectivity on value
3-month price change in %
16
Growth: superior fundamentals
GROWTH SECTORS • Only modest earnings revisions in Health
14 Information
Care, IT and Communication
Technology
Materials
12 Value: under-owned
• Severe EPS cuts (Banks, Energy)
10 • Low interest rates, low oil price and reduced
Communication investment spending remain a head-wind
Services
• But: under-owned and trading at discount
8 S&P 500
6 VALUE SECTORS Health Care FOCUS
Energy • Technology: structural growth potential
4 accelerated by social distancing & work
from home
Industrials
• Selective cyclical value: Industrials
2 Financials • Defensive sector preference: Healthcare
P/E ratio
0
10 15 20 25 30
Cheap Expensive
Source: Deutsche Bank AG, DWS Investment GmbH. Data as of June 2020.
In Europe, Middle East and Africa as well as in Asia Pacific this material is considered marketing material, but this is not the case in the U.S. No assurance can be given that any forecast or target can be achieved. 27
Forecasts are based on assumptions, estimates, opinions and hypothetical models which may prove to be incorrect. Past performance is not indicative of future returns. Investments come with risk. The value of an
investment can fall as well as rise and you might not get back the amount originally invested at any point in time. Your capital may be at risk.Currencies vs. USD performance
Performance vs. USD YTD
10%
7% The global need for USD liquidity remains
5% 5%
elevated
5%
2%
1% Risk sentiment has emerged as the dominant
0% driving force in price movements as global
0%
central banks are now synchronized in
0%
-1%
-2% -3%
implementing easier monetary policies.
-5% -3% -4%
JPY continues to act as a diversifier and safe-
-10% haven asset in portfolios and continue to
benefit from risk-off sentiment flows in the
-15% near term.
-15%
-17%
-20% GBP levels over the near term will reflect the
market’s evolving expectations on negotiations
-25% during the transitional Brexit period and the
-24% UK’s relative economic positioning amongst its
-30% European peers.
YTD performance vs USD
MXN=Mexican peso; CAD=Canadian dollar; JPY=Japanese yen; BRL=Brazilian real; NOK=Norwegian krone; SGD=Singapore dollar; SAR=Saudi riyal; CHF=Swiss franc;
CNY=Yuan; GBP=British pound; EUR=Euro; AUD=Australian dollar; KRW=South Korean won; SEK=Swedish krona; TRY=Turkish lira; YTD=year-to-date. Source: Deutsche
Bank AG, Datastream; Data as of August 4, 2020.
In Europe, Middle East and Africa as well as in Asia Pacific this material is considered marketing material, but this is not the case in the U.S. No assurance can be given that any forecast or target can be achieved. 28
Forecasts are based on assumptions, estimates, opinions and hypothetical models which may prove to be incorrect. Past performance is not indicative of future returns. Investments come with risk. The value of an
investment can fall as well as rise and you might not get back the amount originally invested at any point in time. Your capital may be at risk.Gold remains attractive
Gold price vs. U.S. Treasury inflation-protected security yields
2500 3.5
The potential for gold
3
Uncertainties surrounding the global pandemic
2000 2.5 and a prolonged low-interest rate environment
continue to aid gold.
2
1500 1.5
We expect gold prices to remain at elevated
levels in relation to recent history with support
1 coming from a steady demand for safe haven
assets that do not carry negative yields. Lastly,
1000 0.5 central bank buying will continue to represent
an additional source of demand for gold.
0
500 -0.5
-1
0 -1.5
Gold (USD/oz, lhs) TIPS Real Yield (%, rhs, inverted)
Source: Bloomberg Finance L.P, Deutsche Bank AG. Data as of July 27, 2020.
In Europe, Middle East and Africa as well as in Asia Pacific this material is considered marketing material, but this is not the case in the U.S. No assurance can be given that any forecast or target can be achieved. 29
Forecasts are based on assumptions, estimates, opinions and hypothetical models which may prove to be incorrect. Past performance is not indicative of future returns. Investments come with risk. The value of an
investment can fall as well as rise and you might not get back the amount originally invested at any point in time. Your capital may be at risk.States of play
Biden’s choice of Vice President will be seen as a massive signal of what we can expect of the next generation of Democratic
Party leadership and the policy direction they will take. Currently, Biden may be ahead in polls but we expect significant shifts up
or down in the polls based on his choice. In terms of the Senate control, Democrats need to win four seats to gain control of the
Senate – three if Biden wins as the Vice President serves as a tie-breaking vote in the Senate.
Joe Biden Presidential election, win probability, %
Safe
99+
Very likely WA ND
85-99 MT
MN VT
ME
SD WI
Likely OR ID MI NH
Win probability, %
65-85
WY NY
IA MA
NE PA CT
NV IL IN OH NJ
Uncertain UT CO WV DC
RI
DE
KS MO
50-65 KY VA
CA
OK TN
Likely AR
NC MDElectoral
AZ NM SC college
65-85 AK MS GA
AL votes
TX
Very LA 55
25
likely HI
FL 10
85-99
Safe
99+
270 votes
to win
Donald Trump Biden sure Biden very likely Biden likely Uncertain
Source: The Economist, Deutsche Bank AG. Data as of August 4, 2020.
In Europe, Middle East and Africa as well as in Asia Pacific this material is considered marketing material, but this is not the case in the U.S. No assurance can be given that any forecast or target can be achieved. 30
Forecasts are based on assumptions, estimates, opinions and hypothetical models which may prove to be incorrect. Past performance is not indicative of future returns. Investments come with risk. The value of an
investment can fall as well as rise and you might not get back the amount originally invested at any point in time. Your capital may be at risk.Is the election already over?
Not by a long shot – four months will feel like four years. The issues will be big
and emotional and the polls are likely to bounce around week after week.
Major Trump Major Biden
Campaign Themes Campaign Themes
• Recovery of the economy • Recovery of the economy
• China challenge – “I’m tougher” • Social justice and equality
• Trade • Healthcare
• Crime/Drug Problem • China challenge – “I’m tougher”
• Taxes • Trade
• Infrastructure • Infrastructure – Green New Deal 2.0
• Environment/climate change/ESG
Source: Deutsche Bank AG. Data as of July 2020.
In Europe, Middle East and Africa as well as in Asia Pacific this material is considered marketing material, but this is not the case in the U.S. No assurance can be given that any forecast or target can be achieved. 31
Forecasts are based on assumptions, estimates, opinions and hypothetical models which may prove to be incorrect. Past performance is not indicative of future returns. Investments come with risk. The value of an
investment can fall as well as rise and you might not get back the amount originally invested at any point in time. Your capital may be at risk.Biden’s policies as we know them now
Tax Policy: Foreign, Defense, and Trade Policy:
• Corporate taxes increase to 28%+ • EU and NATO reconciliation – to some degree.
• High-net worth clients will see tax increases • China will continue to dominate as the
– expect serious debate on wealth tax and foreign/defense/trade policy issue. What will change
asset tax will be:
• Carbon tax o U.S. likely to join TPP – the NATO of the Indo-
• But until the economy is fully back on its Pacific?
feet, not much can much more be done? o U.S. focusing on Chinese human rights abuses
• Latin America will come in for renewed focus,
Healthcare: especially Venezuela and Brazil
• Biden is campaigning on bolstering • Iran will continue to dominate Mid-East policy. Any
Obamacare, not Medicare for all. chance for new negotiations over the JCPOA?
• Significant new funding for health crisis • Russia will face tougher relationship
planning. • The Arctic will become a major foreign policy and
environment flashpoint between the U.S., China and
Russia.
Environment:
• Signing on to the Paris Climate Accord
• Return plus to Obama regulatory policies
• Infrastructure - Green New Deal 2.0
Footnotes: TPP stands for Trans-Pacific Partnership. JCPOA stands for the Joint Comprehensive Plan of Action, commonly known as the Iran nuclear deal.
Source: Deutsche Bank AG. Data as of July 2020.
In Europe, Middle East and Africa as well as in Asia Pacific this material is considered marketing material, but this is not the case in the U.S. No assurance can be given that any forecast or target can be achieved. 32
Forecasts are based on assumptions, estimates, opinions and hypothetical models which may prove to be incorrect. Past performance is not indicative of future returns. Investments come with risk. The value of an
investment can fall as well as rise and you might not get back the amount originally invested at any point in time. Your capital may be at risk.Impact on economy and markets
Summary
Growth disparities Fixed income and equity FX and commodities
Global recession, stabilization Low growth & monetary Stable USD expected, status
end 2020, recovery expected in stimulus to keep yields low as a safe-haven currency
2021 during crisis
Focus on more defensive
China ahead in terms of growth investment-grade bonds Weaker CNY through trade
rebound in 2020 tensions
Moderate upside potential after
U.S. and Europe increased debt recovery of last months Gold prices to be supported by
levels to counter crisis low rates and demand for safe
Valuations remain elevated
LatAm limited fiscal capacity haven assets
Focus: IT and Healthcare
Source: Deutsche Bank AG.
In Europe, Middle East and Africa as well as in Asia Pacific this material is considered marketing material, but this is not the case in the U.S. No assurance can be given that any forecast or target can be achieved. 33
Forecasts are based on assumptions, estimates, opinions and hypothetical models which may prove to be incorrect. Past performance is not indicative of future returns. Investments come with risk. The value of an
investment can fall as well as rise and you might not get back the amount originally invested at any point in time. Your capital may be at risk.01 02
The idea Impact on
of kairos economy & markets
03
Future of 04
ESG and
05
Policy
work & trade conservation implications
In Europe, Middle East and Africa as well as in Asia Pacific this material is considered marketing material, but this is not the case in the U.S. No assurance can be given that any forecast or target can be achieved. 34
Forecasts are based on assumptions, estimates, opinions and hypothetical models which may prove to be incorrect. Past performance is not indicative of future returns. Investments come with risk. The value of an
investment can fall as well as rise and you might not get back the amount originally invested at any point in time. Your capital may be at risk.Where will productivity go from here?
Productivity vs. average hourly earnings of production
2100
Productivity and technological changes
1900
Based on past recessions, labor productivity is
1700 likely to rebound cyclically as the global
1500 economy recovers, but is likely to remain below
the pre-pandemic level.
1300
The rise in remote working due to COVID-19
1100
led to a rise in working hours but not necessarily
900 productivity.
700 Organizational and technological changes to
the way businesses operate are here to stay.
500
Productivity dampening effects may appear if
300 they erode capital or disrupt the accumulation
of physical or human capital. Productivity
100 enhancing effects are also possible by
1964 1970 1976 1982 1988 1994 2001 2007 2013 2019 eliminating the least efficient firms and
encouraging the adoption of efficient
Productivity production technologies. Acquiring the required
skills to complement new technologies will be
Average Hourly Earnings of Production and Nonsupervisory
key.
Employees
Source: Federal Reserve Bank of St. Louis, The Economist, World Bank, Deutsche Bank AG. Data as of May 2020.
In Europe, Middle East and Africa as well as in Asia Pacific this material is considered marketing material, but this is not the case in the U.S. No assurance can be given that any forecast or target can be achieved. 35
Forecasts are based on assumptions, estimates, opinions and hypothetical models which may prove to be incorrect. Past performance is not indicative of future returns. Investments come with risk. The value of an
investment can fall as well as rise and you might not get back the amount originally invested at any point in time. Your capital may be at risk.Labour market responses
Perspectives from Europe
• Strongest economic downturn expected as large amount of SMEs cause higher risk of
default
• EU response: Support through the European Social Fund, new financial instrument: Loans
up to €100bn, underpinned by system of voluntary guarantees
Perspectives from the U.S.
• Job loss concentrated among low-wage workers and women, with a modest rebound in May
• U.S. response: relief for individuals and businesses, unemployed workers get additional 13
weeks of benefits and receive an extra $600 a week for up to six months
Perspectives from Asia
• Large percentage of informal workers with no access to sick leave or unemployment benefits
• Policy responses include the expansion of social assistance and other programmes, new
transfers regulations, public work programmes, employment retention
Sources: Deutsche Bank AG, IMFBlog, Doer et al. Data as of July 2020.
In Europe, Middle East and Africa as well as in Asia Pacific this material is considered marketing material, but this is not the case in the U.S. No assurance can be given that any forecast or target can be achieved. 36
Forecasts are based on assumptions, estimates, opinions and hypothetical models which may prove to be incorrect. Past performance is not indicative of future returns. Investments come with risk. The value of an
investment can fall as well as rise and you might not get back the amount originally invested at any point in time. Your capital may be at risk.Future of work
• Extended employment of contingent vs. full-time
employees to achieve more flexibility
• Higher focus on resilience rather than efficiency
• Increase in organizational complexity due to post-
COVID-19 M&A
• Rise in the use of cloud services
• Heightened importance of cybersecurity
Sources: Deutsche Bank AG, Deloitte. Data as of 2020.
In Europe, Middle East and Africa as well as in Asia Pacific this material is considered marketing material, but this is not the case in the U.S. No assurance can be given that any forecast or target can be achieved. 37
Forecasts are based on assumptions, estimates, opinions and hypothetical models which may prove to be incorrect. Past performance is not indicative of future returns. Investments come with risk. The value of an
investment can fall as well as rise and you might not get back the amount originally invested at any point in time. Your capital may be at risk.What is to change structurally?
• Economically more developed countries have higher
abilities to offer work from home
• Wage employment percentage vs. self-employed as
decisive factor
• Salaried employees home office hours per week
increased by more than 21% with expectation to
remain elevated
Pros of Working From Home:
• Employees stated to be happier, more productive
and less likely to quit
• Time and money saving effects
Cons of Working From Home:
• Potential motivational problems
• Promotions become less likely
• Isolation might affect mental health
Sources: Gottlieb et al. 2020, Bloom et al. 2015, Von Gaudecker et al. 2020, Deutsche Bank AG.
In Europe, Middle East and Africa as well as in Asia Pacific this material is considered marketing material, but this is not the case in the U.S. No assurance can be given that any forecast or target can be achieved. 38
Forecasts are based on assumptions, estimates, opinions and hypothetical models which may prove to be incorrect. Past performance is not indicative of future returns. Investments come with risk. The value of an
investment can fall as well as rise and you might not get back the amount originally invested at any point in time. Your capital may be at risk.Rise of “stakeholder capitalism”
Answers of CEOs of Fortune 500 companies
What are your top concerns with respect to business risk management in today’s current environment?*
70
60
50
40
30
20
10
0
Keeping my Providing additional Short term Dependencies on Supply-chain Impact on my Economic
employees safe benefits and liquidity federal, state, continuity costumers and forecasts and
and productively flexible work and local uncertainty with uncertainty with
employed arrangements governments their business demand for my
continuity or products and
vulnerability services
My number one concern One of my top three concerns A concern, but not among my top three Not a major concern
*Risk question provided by survey sponsor, Zurich North America Insurance.
Footnotes: A similar survey question was “Regarding moving toward stakeholder capitalism, I believe the pandemic will”: Accelerate the move (48.2%), Slow the move (18.1%),
Have no effect (31.3%), Other (2.4%). Corporate behavioral changes include the increasing interest of corporations to serve the interests of all their stakeholders. This includes
factors such as more attention to healthcare needs, community and employee investment priorities. Source: Fortune 500 survey. Data as of June 2020.
In Europe, Middle East and Africa as well as in Asia Pacific this material is considered marketing material, but this is not the case in the U.S. No assurance can be given that any forecast or target can be achieved. 39
Forecasts are based on assumptions, estimates, opinions and hypothetical models which may prove to be incorrect. Past performance is not indicative of future returns. Investments come with risk. The value of an
investment can fall as well as rise and you might not get back the amount originally invested at any point in time. Your capital may be at risk.Consumer behavior shifts
U.S. consumer spending changes by different categories
400%
300%
200%
100%
0%
-100%
-200%
Grocery Pharmacy Apparel Casual Dining Fast Food Food Delivery Grocery Airline Hotel
Delivery
Feb 25, 2020 YoY Spending May 5, 2020 YoY Spending Overall Change
Source: The Visual Capitalist, Deutsche Bank AG, Data as of May 12, 2020.
In Europe, Middle East and Africa as well as in Asia Pacific this material is considered marketing material, but this is not the case in the U.S. No assurance can be given that any forecast or target can be achieved. 40
Forecasts are based on assumptions, estimates, opinions and hypothetical models which may prove to be incorrect. Past performance is not indicative of future returns. Investments come with risk. The value of an
investment can fall as well as rise and you might not get back the amount originally invested at any point in time. Your capital may be at risk.Adoption of digital sales channels rises
% of respondents satisfied with digital adoption in the U.S.
73% Human behavioral changes
• More rapid technology adoption
61% • Increased consumer caution
• Virtual work experiences and
51% communication
• Remote learning
51%
45% • Contact tracing and surveillance
30% 37% • Privacy tradeoffs for health
security
• Evolving and new employer-
33% employee social contracts
31%
37%
31%
17% 21%
13%
6%
Average Grocery Apparel Travel
Banking
(all industries)
Regular users First time users
Source: McKinsey & Company, Deutsche Bank AG. Data as of May, 2020.
In Europe, Middle East and Africa as well as in Asia Pacific this material is considered marketing material, but this is not the case in the U.S. No assurance can be given that any forecast or target can be achieved. 41
Forecasts are based on assumptions, estimates, opinions and hypothetical models which may prove to be incorrect. Past performance is not indicative of future returns. Investments come with risk. The value of an
investment can fall as well as rise and you might not get back the amount originally invested at any point in time. Your capital may be at risk.Accelerating digital
transformation
The current crisis is accelerating pre-existing
technology trends
• Evolving technology channels
for customer engagement
• Digital processes, automation and AI as
productivity drivers
• Data driven strategy and decision-making
• Lighter physical space footprints
• 5G as a robust technology solution
• Medical technology on the forefront
Source: Deutsche Bank AG. Data as of May 2020.
In Europe, Middle East and Africa as well as in Asia Pacific this material is considered marketing material, but this is not the case in the U.S. No assurance can be given that any forecast or target can be achieved. 42
Forecasts are based on assumptions, estimates, opinions and hypothetical models which may prove to be incorrect. Past performance is not indicative of future returns. Investments come with risk. The value of an
investment can fall as well as rise and you might not get back the amount originally invested at any point in time. Your capital may be at risk.Central bank digital currencies (I)
What is it? Why? How?
• Digital currency issued by the • Financial inclusion
• Wholesale purpose (token-based)
central bank • Increased efficiency and speed
• Limited access to banks and
• Alternative to traditional fiat- • Enhanced security financial institutions
currencies
• Disintermediation – major • General purpose (account-based)
• >80% of central banks are challenges for banking system
exploring the issuance of CBDC • Individual accounts are held at
• Exploring new levels of negative the central bank
• Sweden & China most advanced interest rates
countries, running pilot projects • General purpose (token-based)
• Better trace ability
• Allowing cash-like transactions
• Easier monetary policy transmission
Operational Risks Strategy & Policy Risks Financial Risks
• Fraud • Payment systems • Liquidity
• Legal • Financial and price stability • Financial market implications
• IT infrastructure • Economic growth • Credit/Lending
Reputational Risks
Source: Deutsche Bank AG, Deutsche Bank Investment Strategy Group. Data as of July 24, 2020.
In Europe, Middle East and Africa as well as in Asia Pacific this material is considered marketing material, but this is not the case in the U.S. No assurance can be given that any forecast or target can be achieved. 43
Forecasts are based on assumptions, estimates, opinions and hypothetical models which may prove to be incorrect. Past performance is not indicative of future returns. Investments come with risk. The value of an
investment can fall as well as rise and you might not get back the amount originally invested at any point in time. Your capital may be at risk.Central bank digital currencies (II)
Token-based CBDC Account-based CBDC
Traditional central bank money CBDC
Reserves and
Cash Token-based Account-based
settlement balances
Permanent availability ✓ X ✓ ✓
Anonymity ✓ X ✓ X
Peer-to-peer transfer ✓ X ✓ X
Interest-bearing X ✓ ✓ ✓
Limits or caps X X ✓ ✓
Source: Deutsche Bank AG, Deutsche Bank Investment Strategy Group. Data as of July 24, 2020.
In Europe, Middle East and Africa as well as in Asia Pacific this material is considered marketing material, but this is not the case in the U.S. No assurance can be given that any forecast or target can be achieved. 44
Forecasts are based on assumptions, estimates, opinions and hypothetical models which may prove to be incorrect. Past performance is not indicative of future returns. Investments come with risk. The value of an
investment can fall as well as rise and you might not get back the amount originally invested at any point in time. Your capital may be at risk.Technology developments with
disrupted trade flows
Perspectives from Europe
• Operational resilience as core topic with increasing dependency on non-EU tech providers
• Increasing desire for regional solutions
• Uptake of contactless payment pressures investments in tech infrastructure (5G)
• Digital solutions depend on pending on EU’s digital legislation
Perspectives from the U.S.
• Protectionist measures taken against slow production and tech-components limitation
• Focus on "Make America Great Again", produce, buy and consume U.S. products
• Bring supply chains closer to home
Perspectives from Asia
• Lockdown underlines need for access to technological infrastructure in India
• China: integration of artificial intelligence and big data with health code systems (app to self-
monitor health status and prove it to others) that evolve into smart social services
• China: focus on long term innovation strategy and emerging technologies – Made in China 2025
and China Standards 2035
Source: Deutsche Bank AG. Data as of July 2020.
In Europe, Middle East and Africa as well as in Asia Pacific this material is considered marketing material, but this is not the case in the U.S. No assurance can be given that any forecast or target can be achieved. 45
Forecasts are based on assumptions, estimates, opinions and hypothetical models which may prove to be incorrect. Past performance is not indicative of future returns. Investments come with risk. The value of an
investment can fall as well as rise and you might not get back the amount originally invested at any point in time. Your capital may be at risk.Is localization the new normal?
The current crisis has made trade links between Asian and American countries vulnerable to a reorganization of global value
chains. In 2019, the intracontinental trade weights accounted for almost 54% of global trade and transcontinental for 37% of
global trade (remaining 9% other). We see globalization remaining, albeit at a slower pace, and how it is done will be different
going forward. Rivalry for geopolitical leadership, pandemic-related issues, and the trade deal between U.S. and China will play
a role.
Intracontinental trade outweighs transcontinental trade
% of global trade, 2019
Americas
America to Asia Middle Asia to America
East
Africa
Source: Deutsche Bank Research, Deutsche Bank AG. Data as of June 2020.
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Forecasts are based on assumptions, estimates, opinions and hypothetical models which may prove to be incorrect. Past performance is not indicative of future returns. Investments come with risk. The value of an
investment can fall as well as rise and you might not get back the amount originally invested at any point in time. Your capital may be at risk.You can also read
