A growth slowdown is underway, with manufacturing weakness increasingly spilling over to the services sector. Our below-Consensus forecasts for real GDP growth in the US and Europe remain unchanged. Monetary policy easing will continue, but is becoming increasingly ineffective, particularly in the Euro area.
Weakness in global manufacturing is deepening and increasingly spilling over to the services sector.
Another Brexit delay remains our base case ahead of the 31 October deadline.
We keep our below-Consensus forecasts for real GDP growth in the US and Europe unchanged.
We expect two more rate cuts by the US Fed and slightly lower ECB rates, too. However, monetary policy is reaching its limit in the Euro area. Expect large-scale fiscal easing only if the downturn deepens.