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CONTRIBUTORS

Michael Hasenstab, Ph.D.

Portfolio Manager, Chief Investment Officer, Templeton Global Macro®

Calvin Ho, Ph.D.

Portfolio Manager, Director of Research, Templeton Global Macro

Key takeaways

͏͏͏͏͏November overview: Even as more tariff packages are finalized, the situation remains fluid. The US government shutdown ended on November 12, but the effects will likely be felt for some time yet. Some US data has been delayed or will not be released at all due to the shutdown, adding uncertainty to assessing economic conditions. Global growth-related releases mostly remained relatively resilient even as risks remain elevated, but Japanese growth fell amid payback from previous front-loading. Inflation data in developed economies generally confirmed some pricing pressures creeping back into the data, though inflation is mostly more contained among a variety of emerging markets (EM). It was a quiet month for developed market monetary policy activity, while some EMs eased rates further. The US dollar (USD) was modestly weaker in November, appreciating against most Asian currencies but generally weaker against others. Bond yields were mixed during the month.    

Outlook: Uncertainty remains elevated in the shorter term, as final tariff levels are still not decided for a number of countries and the Supreme Court is due to rule on the legality of tariffs imposed by the president rather than Congress; the ruling may take some months yet. Over the medium term, our focus for investment revolves around our assessment of “global rewiring”—evolving patterns and relationships that we anticipate affecting certain economies and markets for some time to come. Such rewiring could cover relationships between countries or developments within particular regions or economies. Our core themes of improving EM fundamentals, USD weakening and geopolitically induced shifts in global supply chains remain intact. Risks from US tariff and trade policy encompass growth, inflation and/or geopolitical implications and vary by country. Domestic political developments in some countries raise fiscal and other policy concerns.  

Continue reading further by downloading the PDF, which highlights the Templeton Global Macro team’s market and economic overview, and outlook for the month.

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