Looking Ahead:
Global PMIs should show the economic pick-up is broadening, highlighted by the eurozone flash manufacturing PMI hitting a three-year high in November. Another upbeat U.S. jobs report would focus the market’s attention on the number of Fed rate increases in 2017.
Key European political events are now in focus as investors look for another potential populist backlash. The Italian constitutional referendum on Dec. 4 comes as the conservative candidate in France’s presidential election next year is being finalized.
We expect investors to remain pessimistic on Europe relative to upbeat U.S. reflation prospects. We are neutral on European government bonds and favor investment-grade debt due to the ECB’s ongoing purchases. We are underweight European equities on concerns about the growth outlook.
Download BlackRock's complete commentary, including charts and 3-month expectations by asset class here, or read BlackRock's view on theimpact of Donald Trump's election on the stock market.
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