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VIEW: Deutsche Bank Predicting Global Recession

GLOBAL

Deutsche Bank believes that a global recession will be hard to avoid if central banks are to win against inflation. It is also predicting a 25% fall in major equity markets.

  • Its research finds that previous episodes where core inflation falls by at least 2pp, unemployment rises by at least 2pp and in most cases there is at least a mild recession.
  • Deutsche is forecasting global growth to slow to 2% in 2023 with GDP contracting by 1% in the euro area next year and by 1.25% in the US.
  • They see the risks to the Fed funds rate to the upside but their central case is for it to peak at 5.1% in May 2023. As a result the USD should decline and Deutsche expects EURUSD to reach 1.15 late in the year.
    - The Australian

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