The global economy in pictures Jan 2016
2015 in review
Spring
Summer
•ECB* announce QE* of €60 billion
per month
•Weakness in China prompted
monetary easing and
fiscal stimulus
•Strength in US shale gas led to
a fall in commodity prices
•Panic after China equity
bubble popped leading to
equity sell-off
•Further worries after authorities
devalue CNY
A desynchronised
Winter in 2015
Winter
Autumn
•China fears spread to
Emerging Markets - as
commodity prices fall - and
the US, leading the FED against
raising interest rates
Historic agreement on
climate change, but will it
change the world?
Fears reduced as
government announced
fiscal stimulus measures
and PBoC* announce
monetary policy easing
BoJ* refrained from
increasing QQE* despite
disappointing economic
growth, but did keep
policy loose
ECB* disappoints investors
with small increase
in stimulus
FED* finally raises rates
resulting in strong rally in
the USD
2015 will probably be remembered for the lacklustre performance of markets, and the uncertainty caused by central banks’ actions (and inactions)
Five lessons from 2015
Rumours of Chinese
market reforms were
greatly exaggerated
Oil producers
were resilient as oil
prices stayed low
US rates were
able to rise without
causing mayhem
Greece forced
to take bailout
package
ECB* President loses
popularity after refraining from
adding monetary easing
Political uncertainty
Five themes for 2016
China enters the
currency war
Services vs.
manufacturing split
The desynchronised
cycle continues
Emerging markets
continue to struggle
Gradual depreciation
of CNY challenges
competitors
International sectors
likely to become
pressurised, domestic
service sector should
continue to thrive
Monetary tightening in
the US, loosening policy
elsewhere
Pressure on Emerging
Markets commodity prices.
Investors may be deterred by
potential downgrades and
an increase in defaults
US presidential election year
leading to Trump presidency?
UK referendum on EU
membership leading to Brexit?
Uncertainty will weigh heavy
on investment decisions
*ECB - European Central Bank, *FED - Federal Reserve, *QE - Quantitative Easing, *QQE - Qualitative and Quantitative Easing, *PBoC - People’s Bank of China,
*BoJ - Bank of Japan
Source: Schroders as at January 2016.
Important Information:
Any security(s) mentioned above is for illustrative purpose only, not a recommendation to invest or divest.
This document is intended to be for information purposes only and it is not intended as promotional material in any respect. The material is not intended to provide, and should not be relied on for
investment advice or recommendation. Opinions stated are matters of judgment, which may change. Information herein is believed to be reliable, but Schroder Investment Management (Hong Kong)
Limited does not warrant its completeness or accuracy. Investment involves risks. Past performance and any forecasts are not necessarily a guide to future or likely performance. You should
remember that the value of investments can go down as well as up and is not guaranteed. Exchange rate changes may cause the value of the overseas investments to rise or fall. For risks associated
with investment in securities in emerging and less developed markets, please refer to the relevant offering document. The information contained in this document is provided for information purpose
only and does not constitute any solicitation and offering of investment products. Potential investors should be aware that such investments involve market risk and should be regarded as longterm investments. Derivatives carry a high degree of risk and should only be considered by sophisticated investors. The fund is authorized by the SFC but such authorization does not imply official
approval or recommendation. Schroder does not provide any securities or investment products for offer, solicitation or trading within The People’s Republic of China (PRC). Should illegitimacy arise
thereof, contents of this document shall not be construed as an offer or solicitation or trading for such securities or products. All items mentioned herein are sold through financial products issued by
commercial bankers in the PRC under regulations by the China Banking Regulatory Commission (CBRC). Investors should read the relevant documents clearly before invest in the mentioned funds.
Please consult the relevant commercial bankers in the PRC and/or professional consultants if necessary. This material including the website has not been reviewed by the SFC. Issued by Schroder
Investment Management (Hong Kong) Limited.
Schroder Investment Management (Hong Kong) Limited
Level 33, Two Pacific Place, 88 Queensway, Hong Kong
Telephone +852 2521 1633 Fax +852 2530 9095 0116/CNEN