Insight

Multi-sector asset allocation outlook – Q2 2020

Multi-sector asset allocation outlook – Q2 2020
The coronavirus crisis has delivered a shock to the global economy. Invesco Fixed Income has adapted a framework to forecast macro fundamentals to aid in asset allocation.

The coronavirus crisis has delivered a shock to the global economy that is unprecedented in size and cause, however methods of economic forecasting based on standard economic variables are not sufficient to analyze global economic growth. 

Invesco Fixed Income have adapted by utilizing a framework based on the path of infections to help forecast macro fundamentals. Evidence from China suggests that, once infections have been controlled, some back-to-work can be reintroduced. Fiscal and monetary stimulus adds fuel to the back-to work-process, but we believe it will take time and likely be a prolonged process to get back to work fully around the world. Global inflation remains low and we do not expect inflation to rise in the near term. Global policy has been eased substantially but the pace of economic recovery will likely depend on developments surrounding the containment of the virus.

The team shares more in the latest Multi-sector asset allocation outlook. To read, click on “Download PDF”.