The speed at which global markets have pivoted from maximum bearish on China equities to maximum bullish has been dizzying. After three years of draconian lockdowns, the prospect of unleashed, pent-up Chinese households poised to spend some USD 2.6 trillion in accumulated savings – the largest new pool of savings in recorded history – has sent a shiver of anticipation across global economies and markets.
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Growth outlook improves: Given the faster pace of reopening in China and the recent sharp drop in energy prices, we have lifted our growth forecasts for some major regions. The pace and fashion of China’s reopening have surprised us. While we were expecting a gradual reopening, the actual developments have been meaningfully different.
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Several factors, including surprisingly resilient industrial data of late, lower energy prices and China reopening, have prompted us to now expect the Eurozone to grow by 0.5% in real terms in 2023 and by 1.4% in 2024.
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