The Macro Report | November 2017

Narrowing the range of risks


October marked another month of global expansion, and financial markets remained upbeat against a backdrop of low inflation. The European Central Bank announced it will reduce its bond-buying program starting in January, while the Bank of Japan remained on the dovish policy extreme. October was also a positive month for global risk appetite. Investor demand supported equities and non-gold commodities. In political developments, Chinese President Xi Jinping secured a second term in office and Japanese Prime Minister Shinzō Abe celebrated an electoral triumph in snap elections last month.

The U.S. impasse with North Korea has quieted recently to an exchange of threats on Twitter. These developments, along with the emerging tax plan in the United States and the nominee for Federal Reserve chair, resolved a set of uncertainties that arose in recent months. The questions that remain involve the course of inflation and how central banks are interpreting it. In Saudi Arabia, a recent corruption crackdown led to the arrests of many members of the business elite and the royal family. If this indicates that serious change is underway in the kingdom, we’ll have to rethink the geopolitics of the Middle East.


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October marked another month of global expansion, and financial markets remained upbeat against a backdrop of low inflation.