蜜豆视频

In our recent report, we address 10 of our clients most critical market questions. Read a short summary of our findings.

China set an ambitious GDP growth target of 鈥渁round 5%鈥� again for 2025 and announced modest policy stimulus including higher headline fiscal deficit by 1ppt (to 4% of GDP) and larger issuance of special CGB and special LGB, leading to a 1.5-2% of GDP expansion of overall augmented fiscal deficit. Monetary will be more supportive and we expect 30-40bp policy rate cuts in 2025. The government prioritized 鈥渂oosting consumption鈥�, with trade-in subsidies for consumer goods doubled to RMB 300bn, but the annual increase of social insurance spending looks modest. More measures to stabilize the housing market were proposed, while the policy design and execution are the key. Given the persistent domestic growth headwinds and external uncertainties, we think China may need to roll out additional policy support later this year to achieve its growth target. We maintain our baseline GDP growth forecast at around 4% in 2025.

Comparisons of the current period with that of the phase leading up to the September 1985 Plaza Accord are understandable. Then, the USD was widely perceived as overvalued, as evidenced by a widening US trade deficit and growing trade surpluses in key trading partners like Japan and Germany. Fast forward 40 years and many easy parallels can be seen. The US is pushing for general and material tariffs, with a message that it seeks to negotiate much better trading terms as the way to avoid them. We argue that, while an explicit multi-lateral FX arrangement is unlikely, bilateral arrangements between the US and key trading partners could create a mosaic that resembles a 鈥淧laza 2.0鈥� outcome.

Currently, it seems as if the Eurozone economy were in wait-and-see mode. We believe the answer will depend on the materialisation of key risks: potential US tariffs to the downside, and fiscal expansion (which is arguably turning from a "risk" to the base case scenario) and potential benefits from a Ukrainian ceasefire to the upside. But we fear that the downside from US tariffs would come hard and fast while potential benefits from fiscal expansion and Ukraine would take at least a number of quarters to unfold. Hence, we suspect the next move for European GDP growth might well be down, before a more lasting recovery gains momentum with some delay.

Europe鈥檚 economy could benefit from a ceasefire through lower energy prices, improved business/household confidence and higher defence and reconstruction spending (the migration flow impact is less clear). We estimate roughly a 0.5-1pp boost to GDP, spread over three years. The reconstruction spending is potentially large (3陆% GDP), but could spread out over 10 years; it is likely to mainly benefit specific European firms (e.g. construction). How reconstruction would be funded is still unclear, but it would add only about 0.3% GDP in 10y equivalent duration supply if funded through common issuance. Overall duration supply remains below 鈥�24 levels until 2027E.

Not a lot it seems. The S&P 500 jumped above 6,000 in the wake of the Presidential election. Small business optimism measured by the NFIB posted the largest one month gain in the survey's history. CEO sentiment firmed with expectations of tax cuts, less regulation and a pro-growth policy mix. Orders for key capital goods improved. Our recession probability model odds fell as 2024 came to a close. In contrast, since the start of 2025, that has begun to reverse. Investor sentiment appears to have weakened. The S&P 500 has pulled back. Many survey measures have softened. Growth expectations have been taken down too. What John Maynard Keynes described as the unquantifiable "spontaneous optimism" that could lift economic outcomes in the future, seems to have given way to a different reality as 2025 has unfolded.

Over the tactical 1-3m horizon, we expect US equities to underperform Europe and EM equities as US growth and earnings expectations go from exceptional to trend. A cyclical recovery in Europe should mean it does much better than its traditional beta to the US, and it outperforms EM. Over the structural 12-36m horizon, however, we expect US equities to once again outperform Europe and EM. Even after a slowdown, US' GDP, earnings growth and productivity should do better than that of an improved Europe. After a tactical correction, the rotation from US Growth to European Value should stall. A large investment driven China growth boost or a steep supply driven decline in energy prices would prompt us to reconsider this view.

Fiscal policy has been tightening in Europe over the last two years as the Covid and energy support measures were phased out and the EU fiscal rules were applied again. But things may be changing rapidly now with the EU's ReArm Europe package and the announced German fiscal boost. What is the impact on the Eurozone's fiscal stance? Ramping up defense spending (and infrastructure in Germany) will be a multi-year process. Under this assumption, we estimate that the European fiscal impulse would become almost neutral in 2025 (instead of moderate tightening) and turn expansionary afterwards, with 0.6% of GDP in 2026 and 0.8% of GDP in 2027. Assuming moderate fiscal multipliers in the near term, this would imply a growth boost for the Eurozone of 10bp in 2025, 50bp in 2026 and 60bp in 2027.