2018 to be the year when the global economy reflates – Danske Bank

Christin Tuxen, Chief Analyst at Danske Bank, suggests that ‘reflation’ beliefs have been spurred anew by a continued strong global cyclical stance, the enactment of the US tax reform and commodity-price rises.

Key Quotes

“We doubt that 2018 will be the year when the global economy ‘reflates’, despite what looks like a benign growth environment near term.”

“Central bank pricing appears increasingly aggressive in our view and we see potential for eventually fading ‘reflation’ hopes to postpone expectations for a first ECB hike, while the case for a Fed March hike could stay alive for now. This should send EUR/USD firmly below 1.20 in Q1.”