The Macro Report | January 2020

Waiting for the next wave of growth

We believe the global economy will continue to bounce around the current growth pace. Trade, manufacturing, and oil, along with geopolitical risks, will play a role in determining the trajectory. The dramatic drone strike that killed Iranian general Qassem Soleimani in January propelled the United States and Iran to the brink of war (and back) and roiled financial markets. The standoff between President Trump and Iran’s supreme leader Ayatollah Ali Khamenei also caused fluctuations in the volatile oil markets. Crude prices surged after the attack in anticipation of a response from Iran that would disrupt Middle East oil flows.

Slow growth continues to exert pressure on the eurozone’s politics. Spain has a precarious, new coalition made up of center-left and hard-left parties after Prime Minister Pedro Sánchez broke nine months of gridlock in forming a government. Britain will leave the European Union on January 31 three-and-a-half years after the Brexit referendum. There will be a transition period until the end of 2020. And China’s policymakers have sanctioned more measures, including a new loan prime-rate system, in response to economic malaise.

Oil tracks U.S.–Iran tensions

Oil tracks U.S.–Iran tensions

Crude prices are holding steady — after briefly soaring to a more than 3-month high in the aftermath of the assassination of a top Iranian general — amid ample supply and dissipating war fears.

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Growing pains

Growing pains

The global growth outlook is little changed as U.S. economic risks skew to the downside and Europe grapples with waning voter support for center-left socialist parties.

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Fine-tuning China’s economy

Fine-tuning China’s economy

The economy is slowly decelerating, and the government continues to adopt various stimulus measures to buoy growth and manage pressures in the financials sector.

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About the macro report

The Macro Report is written by members of Putnam’s Fixed Income team. With backgrounds in applied economics, currency and interest-rate analysis, and sovereign and local bond market dynamics, this group conducts macroeconomic research in support of Putnam’s global fixed-income strategies.

Michael Atkin, Portfolio Manager
Investing since 1988
Sovereign debt, global growth analysis

Albert Chan, CFA, Portfolio Manager
Interest-rate derivatives, government debt, risk analysis

Onsel Emre, PhD, Analyst
Inflation, risk analysis, global growth dynamics

Sterling Horne, Analyst
Politics and economics

Irina Solyanik, CFA, Analyst
Quantitive analysis, growth forecasting

Izzet Yildiz, PhD, Analyst
Labor market analysis, global growth dynamics