Global economic outlook continued to improve – Wells Fargo

The research team at Wells Fargo Securities explain that the global economic outlook has continued to improve as recent economic weakness has given way to more certainty regarding economic prospects.

Key Quotes

“Some uncertainties remain in place, especially those related to global trade, which was one of the most important drivers of economic growth during the first decade and a half of this century. One of these uncertainties has to do with the new U.S. administration’s talk against international trade. However, we have seen that the Trump administration’s position regarding trade seems to have changed or morphed into a more benign view about the changes needed for trade to benefit the U.S. economy. That is, it seems that the changes being sought on the North American Free Trade Agreement (NAFTA) are more cosmetic right now and the changes do not seem to represent a threat for the trade agreement’s survival. This is a breath of fresh air in the discussion regarding international trade, which has been one of the political issues that have generated great uncertainty for the global economy during the last year or so.” 

“A second uncertainty has been the United Kingdom’s decision to exit the European Union (EU). In March, the United Kingdom finally triggered the clause to leave the EU, a process that will likely take two years. Furthermore, the United Kingdom has been looking into the possibility of negotiating a free trade agreement with the United States and will probably need to do the same with many other countries as it reorients its external trade policy as an “independent” country.”