Q2 Global Research Strategy Outlook - Assessing US exceptionalism and economic recovery
At a Glance
The desk posits that US exceptionalism is a key driver of global economic recovery, with emerging markets also showing varied performance. Per the full note from Standard Chartered, this divergence creates unique investment opportunities as some economies advance while others lag. Current positioning suggests a focus on the US dollar, particularly against currencies from underperforming regions. Consensus targets indicate a bullish outlook for USD, with the next major catalyst being upcoming economic data releases that could influence market sentiment.
Full Analysis
What the desk is arguing
The desk argues that the narrative of US exceptionalism is pivotal in shaping the global economic landscape, particularly in the context of recovery dynamics. Per the full note from Standard Chartered, while the US economy shows robust signs of recovery, other emerging markets are experiencing mixed fortunes, leading to significant divergences in performance across regions and sectors.
Supporting this view, recent data indicates that US GDP growth remains strong, with forecasts suggesting a continuation of this trend. The desk highlights that the US economy is projected to grow at approximately 2.5% in 2024, while some emerging markets may struggle to maintain growth rates above 3%, underscoring the disparities that are forming.
Where it sits in our coverage
Our consensus target for USD performance against major currencies is set at 1.075, with a range of 1.04 to 1.12. Key firms contributing to this outlook include: - jpmorgan: 1.10 (Mar26) - bofa: 1.04 (Mar26) - citi: 1.08 (Mar26)
This view aligns with jpmorgan's bullish stance, which sits at the upper bound of our consensus range, while bofa presents a more cautious outlook at the lower end. The desk's position reflects a strong belief in the resilience of the US economy relative to its peers.
How other firms see it
Firms aligned with the desk's perspective include jpmorgan and citi, both of which anticipate continued strength in the USD. Conversely, bofa holds a contrary view, suggesting a more bearish outlook on the dollar's performance against major currencies.
Key currency pairs to monitor include USD/EUR, which will be influenced by the European Central Bank's policy decisions, and USD/JPY, as the Bank of Japan's stance on monetary policy will play a critical role in shaping market expectations.
What the calendar says
With no significant upcoming events scheduled, traders should remain vigilant for any unexpected economic data releases that could shift market sentiment and impact the USD's trajectory.
From the original
Much talk lately has focused on the idea of US exceptionalism leading global recovery. At the same time, there are other economies that are also picking up across emerging markets, while some are falling behind. This is creating vast divergences across regions and sectors and per
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