As Europe continues to hold center stage, the coming months are likely
to see bouts of market stress followed by relief rallies, according to
Barclays latest flagship quarterly research publication, Global
Outlook: A stressful muddling through. Nevertheless, the
report recommends a neutral position toward risk assets; for investors
prepared to tolerate short-term volatility, risk assets offer
historically high returns relative to perceived safe assets.
“The euro area crisis is likely to continue to weigh on global markets
throughout the year,” said Larry Kantor, Head of Research. “But with
growth persisting outside of Europe and the prospect of further monetary
easing in many countries, investors should resist the temptation to go
short risk assets.”
Among the key recommendations in the report are a favoring of
commodities and select emerging markets government bonds, in particular
China, Turkey, Israel and Brazil. The Global Outlook also points
to the relative attractiveness of US assets as a safe haven,
particularly equities and some asset-backed securities.
Additional themes of Barclays Global Outlook include:
Growth outside of Europe should persist despite the severity of the
European dislocations, and further monetary ease is likely in most
Chinese growth is in the process of bottoming and will improve during
the second half of the year
In FX, expecting continued euro weakening against the dollar
About Barclays Global Outlook
The Global Outlook research report, published quarterly, provides an
assessment of all major economies and outlines the likely implications
for global financial markets, including commodities, credit, economics,
emerging markets, equities, fixed income and foreign exchange.
Barclays moves, lends, invests and protects money for customers and
clients worldwide. With over 300 years of history and expertise in
banking, we operate in over 50 countries and employ over 140,000 people.
We provide large corporate, government and institutional clients with a
full spectrum of solutions to their strategic advisory, financing and
risk management needs. Our clients also benefit from access to the
breadth of expertise across Barclays. We’re one of the largest financial
services providers in the world, and are also engaged in retail banking,
credit cards, corporate banking, and wealth and investment management.
Barclays offers premier investment banking products and services to its
clients through Barclays Bank PLC.