Inflation is in the spotlight as an uneven global recovery unfolds, and the big question for markets is whether recent spikes resolve quickly as pent-up demand and supply bottlenecks clear, or if elevated inflation proves more persistent – and problematic.
The pandemic also still looms large in economic and market outlooks, with economies reopening and prospects growing brighter in many parts of the world, while nations with fewer resources and slower vaccine campaigns are seeing the worst impacts yet.
We’ve gathered viewpoints from our chief global economist and fixed income, equities, and multi-asset teams about what investors might expect for the remainder of the year, how to prepare, and how to tap opportunities emanating from the market disruptions – both good and bad – that we’ll likely continue to see.
Investors are watching the interplay of policy and macroeconomic themes as they look to the end of 2021 and beyond. Markus Schomer discusses the key factors driving markets as we begin to envision a post-pandemic world.
What we see ahead for Asian economies and markets for the remainder of the year.
Economic growth appears to be less sensitive to new Covid-19 surges in Asia, thanks to the effects of fiscal and monetary stimulus, better medical knowledge, and vaccines.
With Asia experiencing an uneven recovery, we expect significant dispersion in returns across industries, markets, and issuers going forward.
In post-Covid Asia, a pivot in resource and capital allocation toward smart infrastructure (including for healthcare), digitization and automation, and environmental imperatives could have a big impact on equity markets.
While Asia continues to deal with the pandemic, the region’s markets continue to benefit from the global upturn, thanks to their cyclical nature.