Europe and Asia to see greater eco­nomic dom­i­nance, says DBS

The China Post - - TAIWAN BUSINESS -

As ma­jor economies made ad­just­ments to their mon­e­tary poli­cies, Europe and Ja­pan have wrested back con­trol of lo­cal stock mar­kets from U.S. in­flu­ence, ac­cord­ing to a quar­terly re­port re­leased by DBS Tai­wan ( ).

The world econ­omy faced more un­cer­tainty be­cause of three fac­tors: a strong U.S. dollar, diver­gent fis­cal poli­cies adopted by ma­jor economies and Amer­i­can en­ter­prises’ fall­ing profit growth.

DBS fore­cast a boom­ing U.S. stock mar­ket in the next few months, which is ex­pected to pro­vide mo­men­tum for Asian stock mar­kets (not in­clud­ing Ja­pan). How­ever, the U.S. econ­omy may take a hit af­ter the U.S. Fed raises in­ter­est rates later this year. With ram­i­fi­ca­tions from this, DBS holds a more con­ser­va­tive stance on eco­nomic per­for­mance over a 12-month pe­riod.

Europe and Ja­pan are poised to see greater growth. Loose mon­e­tary poli­cies have en­abled a weak­ened euro and yen, which has trans­lated into greater ex­port com­pet­i­tive­ness and higher cor­po­rate prof­itabil­ity.

In other parts of Asia, DBS is plac­ing its bets on China, as the coun­try may still cut in­ter­est rates, while its weak cur­rency buoys the lo­cal econ­omy and stock mar­ket.

Gold may re­bound as well, ac­cord­ing to DBS’s re­port, as neg­a­tive rates

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