Important Links

Recession Risks have Diminished

23 April 2019Emerging Markets

While global equity markets have come nearly full circle from a significant correction, Citi analysts have the view that the risk of a recessionary environment has diminished. This is evidenced by the renewed fiscal and monetary policy activity and the latest data coming out from China, US and Germany.

China's economy enjoys good start and may sustain momentum: China's real GDP growth has seen a strong start to the year at 6.4%YoY in 1Q, beating market expectations (6.3%). The gains have been across the board with household income growing faster than GDP that has seen real disposable income rising 6.8%YoY in 1Q and arresting the earlier decline in domestic demand.

US likely to see slower GDP growth of 2.5% in 2019 but this is still well in positive territory: US data also appears to be stabilizing after a weak start in 1Q19. The latest payrolls data for March shows the underlying strength of the US labor market with the economy having added 196K jobs, bouncing back from just 33K in February while the unemployment rate remained at a record low 3.8%. Wages growth advanced a subdued 0.145% MoM, taking the year-on-year reading to 3.2%, below the median for 3.4% and dampening concerns about wage inflation.

Europe still the laggard but German investors may be turning optimistic for the first time this year: The latest German ZEW survey's headline 'Current Situation' index for April came in lower than expected at 5.5 vs 8.5 consensus (11.1 previous) but the more important forward-looking "Expectations" print, which the market monitors more closely, was better than expected at 3.1 vs 0.5 consensus (-3.6 previous) for Germany and 4.5 for Eurozone (-2.5 previous), indicating that the financial participants in the survey may be turning optimistic for the first time this year.

While volatility has risen compared to earlier in the present expansion cycle, Citi's base case view anticipates mid-to-high single digit gains for broad equities over the coming year and perhaps beyond.

Recession Risks have Diminished

Past performance is no guarantee of future results, real results may vary.

Our recent research

China: Improving Fundamentals Could Drive Further Upside

While the rally so far has been mainly driven by policy easing, sentiment recovery and valuation re-rating, Citi analysts expect further upside to be driven more by fundamentals and earnings growth.

Find out more

Economics
The Powerful Credit Expansion in 2019 Marked a Major Turning Point - Market Insights by Citibank UK

The Powerful Credit Expansion in 2019 Marked a Major Turning Point

The China/greater China sector has had a stellar 1Q, with China H-shares and A-shares rallying 12.4% and 28.7%, respectively. This outperformance follows a poor 2018 with full year losses of 10% and 23.6% respectively.

Find out more

Emerging Markets
Strong credit data to reprice easing expectations in 2019 - Market Insights by Citibank UK

Strong credit data to reprice easing expectations in 2019

Money growth rebounded strongly - M2 growth jumped by 0.6pp to 8.6%YoY in March, much higher than market expectations (Citi/Mkt: 8.2%YoY). The corporate demand for credit seemed to have improved and thereby facilitated the process of money expansion.

Find out more

Economics

Take the first steps to your wealth management planning with Citi

Speak to a Relationship Manager
0207 500 1992

Already with Citi? Contact your relationship manager or view product availability on Citi Online

Why choose Citi

A relationship - not just a bank account

A dedicated Relationship Manager giving you access to our internal team of product experts and all our benefits

Access to exclusive Citi products

A range of current and investment products available both on shore and offshore, in the currency of your choice
Multi-currency accounts
Investment products

Global services for a global lifestyle

Our team is here to support you getting started in UK or with International travel and relocation
Moving to and from the UK
Travelling overseas

Offshore investments

We offer a diverse range of banking and investment services, including for those who want access to offshore investments

Find out more

Just moved to the UK?

We can save you time money and hassle. If you are a foreign national in the UK, Citi's International Banking Service can help you manage your money, home and away.

Find out more

Investment products are not insured by any governmental agencies, are not bank deposits, and are neither obligations of, nor guaranteed by, Citigroup, or any of its affiliates, unless otherwise stated. Investment products are subject to investment risks, including possible loss of some or all of the principal amount invested. Past performance is not indicative of future results, investments can go down as well as up.

“Citi analysts” refers to investment professionals within Citi Research (“CR”), Citi Global Markets Inc. (“CGMI”) and voting members of the Citi Global Investment Committee. Citibank N.A. and its affiliates / subsidiaries provide no independent research or analysis in the substance or preparation of this document. The information on this page has been obtained from reports issued by CGMI. Such information is based on sources CGMI believes to be reliable. CGMI, however, does not guarantee its accuracy and it may be incomplete or condensed. All opinions and estimates constitute CGMI’s judgment as of the date of this page and are subject to change without notice. This page is for general information purposes only and is not intended as a recommendation or an offer or solicitation for the purchase or sale of any security or currency. No part of this page may be reproduced in any manner without the written consent of Citibank N.A. Information on this page has been prepared without taking account of the objectives, financial situation, or needs of any particular investor. Any person considering an investment should consider the appropriateness of the investment having regard to their objectives, financial situation, or needs, and should seek independent advice on the suitability or otherwise of a particular investment. Citi Research (CR) is a division of Citigroup Global Markets Inc. (the "Firm"), which does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the Firm may have a conflict of interest that could affect the objectivity of this information. Investors should consider this information as only a single factor in making their investment decision.

Opinions expressed herein may differ from the opinions expressed by other businesses or affiliates of Citigroup, Inc., and are not intended to be a forecast of future events, a guarantee of future results or investment advice, and are subject to change based on market and other conditions.