We emerged with a cautious near-term view from our latest quarterly strategy meeting in early September. In our base case scenario, the global economy is expected to narrowly avoid recession and continue to grow, albeit much more slowly.
Our view over the past few quarters has been that EURUSD should be rangebound, as the cyclical outperformance of the US economy is offset by the eurozone’s relatively better balance of payments position.
EURUSD should be rangebound
We expect another positive year for emerging market debt in 2020, with base case expectations of about 8% returns for emerging market hard currency, and 11% for emerging market local currency.