In its latest Global Perspectives report for December 2014, Standard Life said research it has conducted shows that 2015 has all the hallmarks of a “pivotal year” for global financial markets.
Although the global investment manager said while the global economy continues to expand, “underneath the calm surface” there are “deep and strong currents” with inflation, monetary policy and currency trends affecting developed and emerging markets.
Standard Life Investments head of global strategy Andrew Milligan said 2015 will see “modestly higher” economic growth of around 3.75 per cent, which will see “sufficient corporate earnings” and allow central banks to raise interest rates.
However Mr Milligan said global economic growth is “muted” by the standards of past economic recoveries and the list of countries seeing self-sustaining growth is “worryingly short”.
“We expect further divergence between countries and more varied political economic policy stances as a result,” Mr Milligan said.
“If the US Fed signals a faster tightening path than is currently priced into markets, the impact on the various emerging markets will be substantial,” he said.
One theme that is affecting growth and inflation trends Mr Milligan pointed out is the drop in oil prices.
“A new trading range of $60–$80 per barrel would be supportive for global growth, oil importers and consumer spending, but adverse for some stock markets for which oil exploration companies make up a sizable part of the index,” he said.
