Pacific Investment Management Co. updated its outlook overnight

(This is an ICYMI post)

  • Downgraded its outlook for global growth in 2016: to expand 2% to 2.5% for 2016 (were forecasting 2.6%)
  • Their U.S. GDP growth outlook is now 1.75 to 2.25 % (down 0.25% from their previous forecast in December)
  • See 1 or 2 Federal Reserve rate hikes this year
  • Its China outlook is for 5.5 to 6.5% (left unchanged)
  • On oil, says ... may get to $50/bbl, citing higher demand triggered by lower prices & "supply rebalancing"

On the yuan:

  • Says its "by far the single biggest risk for the global economy and markets this year"
  • They see it depreciating 7% against the USD this year

Other risks they highlight:

  • Possible Brexit
  • US election
  • Ongoing Brazil (and elsewhere) instability
  • Refugee crisis in Europe