In a recent report, Deutsche Bank revealed nine key economic forecasts for 2015. Although the report was focused on the 2015 outlook for Greece, American investors can certainly take advantage of these predictions as well.
1. Greece Will Stay In The Eurozone
Analysts believe that Greece will not exit the eurozone and will continue attempting to get back on track via reform and austerity. While this idea might not have direct implications for American traders (other than owners of National Bank of Greece (ADR) NBG 27.05%), eurozone stability is critical in the global economy.
2. Oil Prices Recover
WTI crude oil prices could slowly recover, rising as high as $70 per barrel by the end of the year.
3. Low Oil Prices Provide Industrial Stimulus
Cheap oil lowers production costs and will spur economic growth in industrialized countries.
4. Interest Rate Hike
Analysts predict a “moderate” increase in U.S. interest rates coming in 3Q15.
5. Extremely Low Inflation
The current environment of low oil prices will lead to low inflation or even deflation in certain world economies.
6. Weakening Of The Euro
The weakness in the euro will continue throughout 2015 as the European economy continues to struggle and the European Central Bank proceeds with its quantitative easing program.
7. Good Year For Equities
Worldwide equity markets should benefit from the European stimulus program, as expansionary monetary policy will increase the money supply.
8. Government Bond Prices Under Pressure
Increases in yields in 2015 will weigh on government bonds.
9. Commodities Not Worth The Investment In 2015
Deutsche Bank’s asset allocation in their 2015 model portfolio consists of 48.5 percent equities, 41.5 percent fixed income and 0 percent commodities.
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