Look at the news headlines from the last few weeks and you might
think that the global recovery is over. From the collapsing oil
price to the emerging market slowdown, euro area deflation and
geopolitical risk, there's plenty to worry about. The most
timely global activity data, the Purchasing Managers' Indices,
suggest that the pace of global activity slowed in the fourth
quarter of last year. And in a classic sign of nervousness,
investors have been dumping equities and buying government
bonds.
So given these signals, why do we think that 2015 will be a year
of reasonable growth, with global activity accelerating?
This is a big subject and this week's Monday Briefing is,
therefore, longer than usual. Before we examine what could go wrong
we look at the three key reasons for our optimism: cheap money,
cheap oil and a resurgent US economy.
