2017: A modest recovery but rising hopes – Goldman Sachs

Research Team at Goldman Sachs, suggests that despite uncertainty on how Mr. Trump’s plans will effect growth, the market expects further fiscal spending and as a result Cyclicals sectors have benefited.

Key Quotes

“Our economics teams expect global growth to reach 3.5% next year (slightly above consensus growth of 3.2%) and estimate that a fiscal fillip could reach 0.75% of GDP in the US and 0.5% in Europe. That said, despite the focus on reflation Euro area core inflation remains subdued (0.8% yoy in October and our economists do not expect it to rise above 0.7% next year). We expect the ECB to extend its APP in its December meeting given lacklustre nominal growth and high debt to GDP ratios.”