Deutsche Bank Research

💬 “A sustained shift in foreign investor US dollar allocation closer to historical norms has the potential to generate huge negative dollar flows.” So just how overweight is the world in US assets? The share of total US portfolio holdings has quadrupled in Europe, from around 5% in 2010 to 20% in 2024. In Japan, it has roughly doubled from 8% in 2010 to around 16%, and the rising share of US asset ownership is especially pronounced in equities. Our Global Head of FX Research George Saravelos believes it is still early days and only time will tell whether these big shifts will actually happen, but the weakening US outlook and the challenging of post WWII norms means “the probability of some of these bigger capital flow shifts is going up.” George spoke to Dani Burger on Bloomberg Brief about why he thinks we are seeing a global rotation out of US assets. They discussed US policy mix, tariff uncertainty, Fed independence, trade imbalance and what all of the recent disruption in the markets could mean for the US dollar. 📺 Watch the full interview (from 2:40) here: https://lnkd.in/eJSKKh-s or here (from 2:40): https://lnkd.in/eYjDwiXb ▶️ Deutsche Bank Research subscribers can read George’s most recent research on this topic here: https://lnkd.in/eh3-mXde #dbresearch #USdollar #USD #FX #Forex

With so much volatility in the world right now, you may be looking for a ‘cheat sheet’ to help you navigate what’s going on. Well, look no further: our ‘House View’ was published this week and below you can read a two page ‘Snapshot’ of Deutsche Bank Research's views on global macro, monetary policy and markets, as well as some of the key themes driving them. The key global takeaways are: 1️⃣ Global growth: expected to be at 2.9% in 2025 and 3.0% in 2026. 2️⃣ Rationale: tariff shock impact and downgrades to US, China, and EU economies. 3️⃣ Key risks: (i) further escalation of the trade war; (ii) individual growth shocks exacerbating countries’ fiscal and sustainability issues; and (iii) worsening geopolitical conflicts in Europe, the Middle East and Taiwan. ▶️ Take a look at the summary below for more detail on Europe, the US, China and Germany, as well as our economists' and analysts' market views. Subscribers to Deutsche Bank Research can access the full House View report here: https://lnkd.in/excCk6dT #dbresearch Marion Laboure, Ph.D. Camilla Siazon

“There’s still a lot of nervousness. We’ve still got these 10% baseline tariffs in place. That’s a huge trade shock relative to anything we’ve seen since WWII.” In a tumultuous week for markets, Deutsche Bank macro strategist Henry Allen appeared on Bloomberg’s The Opening Trade with Kriti Gupta and Guy Johnson to discuss recent developments. His appearance starts at 50:51. https://lnkd.in/erUfhQzc #markets #tariffs #dbresearch Deutsche Bank

🎧 New Podzept podcast episode: The Great Tariff Shock – What’s Next for China and FX? The U.S. has imposed tariffs of over 100% on Chinese goods, marking a dramatic escalation in trade tensions. Are we witnessing a true decoupling of the world’s two largest economies? In our latest episode, Oliver Harvey, Head of EM Currency Research, speaks with Yi Xiong, China Chief Economist, and Mallika Sachdeva, Managing Director in Thematic Research, to unpack the economic and strategic implications of this seismic shift in global trade. Tune in to hear: ➡️ Is the U.S.–China trade relationship over? ➡️How significant is the shock to China’s economy? ➡️Why this could be a turning point for domestic demand in China ➡️The risks and ripple effects of trade diversion ➡️What this all means for the renminbi—and why this time might be different Listen now: https://lnkd.in/eAZm8Avn #Trade #China #Tariffs #FX #GlobalEconomy #Podcast #Markets Deutsche Bank

Im Zeichen der Zölle: Was blüht uns jetzt in Deutschland? Unser Deutschland-Chefvolkswirt Robin Winkler spricht in Podzept über die Achterbahn an den Märkten. Auf die turbulenten Tage mit heftigen Kursverlusten an den globalen Aktienmärkten folgte die Erholungsrallye. Was bedeutet das Hin und Her für die deutsche Industrie? Für Robin Winkler steht fest: Es handelt sich um einen klassischen Handelsschock. Dazu kommen die Unsicherheit und die Kosten, die damit einhergehen. Außerdem in der aktuellen Folge: der schwarz-rote Koalitionsvertrag und welche Erwartungen und Hoffnungen sich daraus für die deutsche Wirtschaft ergeben. Hier können Sie unseren neuen Podcast hören: https://lnkd.in/eYRFQByQ Podzept hier fürs Smartphone abonnieren: https://lnkd.in/eDbTHD8j Jetzt auch auf YouTube: https://lnkd.in/ehtGq2Pv #zölle #handel #deutschland #dbresearch Deutsche Bank

"Tariffs are worse for the U.S. than they are for Europe," says our Head of European Equity- and Cross Asset Strategy, Maximilian Uleer. "There's no winner in this." Max joined CNBC’s ‘Money Movers’ yesterday to recap his market view and discuss how the newly unveiled tariffs from the Trump administration may impact European markets. Max's key takeaways are: 1️⃣ Don’t underestimate Germany’s capacity to change - the German fiscal plan surpassed even our conservative expectations 2️⃣ Tariffs announcements are higher than expected and could be a bigger problem for the US than for Europe 3️⃣ Earnings growth in Europe is trending up while US is trending down – the earnings growth gap between the S&P and STOXX could narrow from 12% last year to 0% this year 📺 Watch his full interview here: https://lnkd.in/ef9zBddD #dbresearch #UStariffs #Europeanequities

Germany faces two urgent challenges: a subscale defence sector and too many car factories lying idle. It now has a historic opportunity to solve both problems by turning some of its automaking prowess to military production. Germany’s decision to relax the debt brake, effectively permitting open-ended borrowing for defence, may encourage resources to move from auto manufacturing to defence, as car production scales back and defence production increases. Retooling auto factories is easier said than done though. It will take several years, even after orders are received, and faces hurdles including the fact that clusters of factories are in largely different parts of the country. In its latest report, the Deutsche Bank Research Institute (DBRI) offers some ideas that could ease the transition. 📄 Read the full report here: https://lnkd.in/gwdsuxM5 ▶️ And visit the Deutsche Bank Research Institute website to sign up to our mailing list: https://lnkd.in/ePqzgrFF #dbri #dbresearch #debtbrake

💡 Current geopolitical tensions are causing supply constraints on rare earth metals. But why is this so problematic? Marion Laboure, and Camilla Siazon have just published a report on all you need to know about rare earth metals, why competition for them is heating up, and how supply risks are accelerating. Here are some of their top takeaways: 1️⃣ Two countries (China and Brazil) account for over 70% of total rare earth reserves 2️⃣ China dominates the supply chain, processing ~85-90% of all rare earth metals, and 100% of heavy rare earth metals 3️⃣ The US and EU import 70% and 39% (respectively) of their rare earth metals from China 4️⃣ While EV headwinds might drag rare earth demand, the global clean energy transition should sustain rare earths past 2025 5️⃣ Increased export controls on rare earths could be next 📄 Read an overview of the report below. Subscribers to Deutsche Bank Research can read the full piece here: https://lnkd.in/efWc83Cc #dbresearch #rareearthmetals

❓ Do you think the US administration would currently prefer a strong or weak dollar? Our Thematic Research team, headed up by Jim Reid, carries out a quarterly global financial market survey, asking simple questions to tease out investors’ thoughts on market-relevant topics. The March 2025 survey, conducted from March 17-20, received 400 responses worldwide. The survey asked investors what they think about tariffs, whether their views on Germany have changed, whether they preferred US or European equities, and other timely topics. 📊 This week’s chart comes from the survey results and shows responses to the question: Do you think the US administration would currently prefer a strong or weak dollar? A surprisingly large majority (60%) think this US administration actively want a weaker dollar. ▶️ Subscribers to Deutsche Bank Research can read the full report on the survey’s results here: https://lnkd.in/eaQdUY_N #dbresearch #chartoftheweek #globalmarkets

Chinese Consumers Feeling Bullish in Q1 2025! 🚀 Is China’s consumer confidence back? Our latest Deutsche Bank survey suggests it might be! Deutsche Bank's Data Innovation Group (dbDIG) surveyed Chinese consumers in Q1 2025 and found a surge in optimism about income and spending. 📈 The results show that 54% of respondents reported feeling financially better off than a year ago, especially among those aged 35 and above and in Tier 1 cities. Increased confidence translates into a spending spree. Discretionary spending willingness hit a one-year high at 52%. Interestingly, sentiment in the property sector remains cautious despite recent market improvements. 💬 "The government's policy stimulus since September 2024 has visibly improved income expectations among Chinese urban residents," says Yi Xiong, our Chief Economist for China. This uptick in consumer sentiment aligns with the government's efforts to boost consumption. New initiatives, such as childcare subsidies and improved leave policies, aim to encourage spending further. #China #ConsumerConfidence #Economy #dbresearch