INVESTOR SURVEY 2020 INVESTOR SURVEY 2020 | 1 - NATWEST MARKETS
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Investor Survey
2020
Investor Survey 2020 | 1
Contents
Introduction 3
Expectations for global growth 4
Global political outlook 6
Monetary versus fiscal policy 8
Forecasts for EU government bonds 10
Sentiment towards foreign
exchange and currencies 11
2020: The year ahead 13
Appendix: Full survey results 14
Investor Survey 2020 | 2
Investor Survey 2020
The macro view of 2020: An investor’s perspective
NatWest Markets’ Investor Survey asked clients to share their thoughts
and expectations for the year ahead. A broad range of clients, including
financial institutions and corporates, were quizzed throughout Q4 2019
about a host of macro- and market-related topics, including: Imogen Bachra, CFA
European Rates Strategy
• expectations for global growth
• the role that monetary and/or fiscal policy will play in supporting
economies in 2020
• the impact of US-China trade relations against the backdrop
of a presidential election
To understand how these geopolitical and macroeconomic events might
affect both the currency and fixed income markets, we asked specific
questions to the different types of investor.
Top five themes
There were several common views shared by respondents, and in this
report, we have identified the dominant trends, comparing them with
our own perspectives. In summary, the five major themes for 2020 are:
1. Expectations for global growth are pessimistic at best
2. There is optimism about the global political outlook
3. Central banks are largely out of ammunition, except
in the US. Fiscal policy is needed
4. Investors expect little change in European bond yields,
especially German government bonds (bunds)
5. There is little optimism about emerging market foreign
exchange (FX) and investors prefer safe-haven currencies,
particularly sterling
The full survey results can be found on page 14 of this report.
Investor Survey 2020 | 3
Global growth
Expectations for global growth
Investor sentiment The outlook for global growth is bleak
NatWest Markets’ view Pockets of pessimism are warranted, less so for Europe
A global slowdown is expected
The survey respondents expect a significant slowdown in gross domestic
product (GDP) growth over 2020 in most regions – especially China, the
US and Europe. We think that some pessimism about growth next year “We believe pessimism
is warranted, especially given the deceleration we saw in China’s GDP is warranted in select
numbers over 2019, and against the calendar of significant geopolitical
events expected in 2020. That said, we have been arguing for some
pockets across the
time now that this pessimism is focused on the wrong places. Instead, globe, and at varying
we believe it is warranted in select pockets across the globe, and degrees”
at varying degrees.
As you can see from Figure 1, the survey expectations for 2020 growth
in China and the US do not differ substantially from NatWest Markets’
forecasts. While we are slightly more optimistic about the US, our forecast
for China growth matches that of the survey’s respondents.
Figure 1: Gross Domestic Product (GDP) growth expectations
Source: NWM Investor Survey 2020; NWM forecasts 2019 and 2020
NatWest Markets 2019 Investor Survey 2020 NatWest Markets 2020
China 6.1% 5.8% 5.8%
US 2.4% 1.4% 1.6%
Europe 1.1% 0.56% 1.0%
Investor Survey 2020 | 4Global growth
Pessimism towards Europe is too strong
When looking at Europe, however, we think the pessimism displayed
in the survey results is too strong. In fact, it is a theme that has persisted
in markets for some time, reflected by the expectations among the survey
respondents for growth in Europe for 2020 of 0.56% – almost half of what
we forecast.
Why do we think this theme is overdone? For context, over the past
27 years, Europe has only grown slower than 0.6% year on year on five
separate occasions – see Figure 2 below. NatWest Markets expects growth
of 1.0% in 2020.
Figure 2: Growth in Europe since 1992
Source: NWM; IMF WEO
6
0.6%
4
2
0
-2
-4
-6
92 994 996 998 000 002 004 006 008 010 012 014 016 018
19 1 1 1 2 2 2 2 2 2 2 2 2 2
Investor Survey 2020 | 5Political outlook
Global political outlook
Investor sentiment Broadly positive expectations for political outcomes
NatWest Markets’ view Less optimistic and more cautious. Consider the details
Political developments are key drivers of growth in 2020
Typically, geopolitical and domestic political events are key for markets, and
this is reflected in the results of the Investor Survey. In the main, investors
view a Brexit conclusion and a US-China trade deal as the dominant upside
risks to growth in 2020. For currency investors, politics is the key driver of
foreign exchange (FX) in G10 countries for 2020¹.
Spotlight on the US
According to the survey results, investors appear sceptical that 2020 will
bring meaningful change in US-China trade relations. But the balance of
risks among responses shows a clear shift towards a better, rather than
worse, outcome (Figure 3).
Figure 3: Where will US-China trade relations be by the end of 2020?
Source: NWM Investor Survey 2020
70%
60%
50%
40%
30%
20%
10%
0%
Relations worse (eg, tariff About the same Better (measured
rates will be higher than (small deals/ by a fair amount
today; addition of other deterioration of reduction in
measures such as capital but essentially tariff rates from
restrictions, etc) little change) current levels)
There is also a clear consensus that Donald Trump will win the next
presidential election (68%), but we do not share the same degree of
certainty. There is a long time between now and the election in November, Notes: (1) G10 countries are Belgium,
and getting a firm handle on the Democrat nominee will be important for Canada, France, Germany, Italy, Japan, the
predicting the outcome. We expect Trump would beat Joe Biden with a Netherlands, Sweden, Switzerland, the UK
narrower margin than Elizabeth Warren, for example. and the US.
Investor Survey 2020 | 6Political outlook
Spotlight on the UK
What about the Brexit deal?
• 47% of respondents expect a harder agreement – ie, a Canada-style
deal with a basic Free Trade Agreement. This view is in line with
ours. We continue to think that the negotiations will ultimately yield
a harder Brexit economic settlement, more in line with Canada’s
arrangements than a Norway+ deal.
• The second most popular choice was for a softer agreement – ie, “Investors are more
a Norway+ deal with a single market alignment and a customs union optimistic about the
(34%). This was surprising for us. As with the US political outlook, it is
clear that investors are more optimistic about the possibility of a softer
possibility of a softer
Brexit outcome than we are. Brexit outcome”
• Only 8% of respondents expect no deal, with a reversion to World Trade
Organization (WTO) arrangements. We agree with the consensus and
expect that the risks of no deal or a WTO agreement are low.
Figure 4: What kind of deal will the UK leave the EU with?
Source: NWM Investor Survey 2020
50%
45%
40%
35%
30%
25%
20%
15%
10%
5%
0%
Norway+: Canada: No deal/ The UK
single market a basic WTO terms remains in
alignment Free Trade the EU
and Customs Agreement
Union
Investor Survey 2020 | 7Monetary vs fiscal
Monetary versus fiscal policy
Central banks, except the Federal Reserve in the US,
Investor sentiment
lack monetary options
NatWest Markets’ view Fiscal policy is finally here, starting in the EU and the UK
Central banks are out of options, except in the US
The survey’s pessimism about the growth outlook is coupled with little In brief: the basics of monetary
optimism about the available policy response from central banks, such and fiscal policy
as the European Central Bank (ECB). As shown in Figure 5, in aggregate, When an economy is in need
83% of investors agree that, globally, monetary policy has run its course. of support, there are tools that
The US is seen as the exception, with 29% agreeing that the Federal central banks and governments
Reserve still has monetary capacity to respond to a shock. Accordingly, can use to make more money
only 14% of respondents expected interest rates to be above 1.5% at available and to encourage
the end of 2020 (versus 1.75% as at December 2019). spending, These are designed
to help stimulate or slow
economic growth and keep
inflation at its target rate. The
Figure 5: Is monetary policy out of space? key is finding the right balance.
Source: NWM Investor Survey 2020
Monetary policy Action taken
by central banks, such as
35% cutting interest rates or keeping
already low interest rates
30%
stable. Interest rates will rise
25%
as the economy improves and
inflation rises. Another example
20% is quantitative easing, when
central banks will buy large
15% amounts of assets, such as
bonds, to pump more money
10%
into the economy. Quantitative
5%
tightening is the reverse of
that, and happens when the
0% economy is overheating.
No Yes, it can’t Yes, except Yes, but Yes, the Yes, the time
defuse the in the US fiscal policy crisis that has come Fiscal policy Action taken by
next will come to redefines for Modern governments, such as reducing
recession the rescue central Monetary taxes or increasing government
anywhere banking is Theory
around the
spending in select areas, by
corner expanding and re-allocating
budgets. When the economy
improves, taxes are raised,
often to help pay for the
government’s additional
spending, and governments
typically cut further spending.
Investor Survey 2020 | 8Monetary vs fiscal
2020 is a year of fiscal policy, starting with Europe (and the UK)
We expect an increasing divergence between monetary and fiscal policy
in the US and the EU in 2020. Interestingly, while there is a clear view
that in the EU fiscal policy could, and should, do more, there is little
consensus that it will. This is reflected in the survey results:
83% 18%
of respondents agree of respondents expect
that monetary policy fiscal policy to come
is out of space to the rescue
Unsurprisingly, in a world of slowing growth, with limited monetary policy
firepower and questions around the size and effectiveness of fiscal policy,
investor risk appetite has waned. The survey respondents think safe-haven
assets (such as gold) will outperform in 2020. In the fixed income market,
respondents prefer government bonds in countries where there is monetary
policy space, such as US Treasuries.
Investor Survey 2020 | 9European bonds
Forecasts for EU government bonds
Investor sentiment Optimistic about Germany, pessimistic about Italy
NatWest Markets’ view Pessimistic about Germany, optimistic about Italy
Spotlight on Germany
German government bonds (bunds) had a record year in 2019. Yields of
10-year bunds hit new lows of -0.7% in August, and have risen to around
-0.2% at the start of 2020. Against this backdrop, however, the survey
consensus predicts little-to-no change in yields, with respondents expecting
a level of around -0.3% in 10-year bund yields to hold throughout 2020.
We are much less optimistic about the prospect for bund yields than
the survey suggests. For the most part, this is due to our confidence
in the EU’s economy. As we suggested before, the survey’s mean forecast
for 2020 growth in the EU is 0.56%, which is almost half our 1% forecast.
This is largely because we anticipate that fiscal policy should mitigate
the downside risk. We expect that we could see positive yields in bunds “We anticipate
(ie, the price of bunds to fall even further) in early 2020. Only 13% of the Italian political
survey respondents agree with us.
environment will
calm in 2020”
Spotlight on Italy
We are also more confident about the outlook for Italy and Italian
government bonds (BTPs) than is the survey consensus. This is largely
due to our expectations for the Italian political environment, which we
anticipate will calm in 2020 and see new elections avoided.
As such, we expect demand for Italian government bonds to increase,
seeing prices rise and yields fall, aligning closer to bunds. We think
the difference or ‘spread’ in yield between BTPs and bunds will reduce
to around 100 basis points² by the end of the first half of 2020, and
43% of survey respondents agree with us.
The majority of survey respondents were less optimistic, seeing the
spread between BTPs and bunds falling to 142 basis points in 2020.
Notes: (2) 100 basis points is equivalent to 1%
Investor Survey 2020 | 10Foreign exchange
Sentiment towards foreign exchange
and currencies
Investor sentiment Stick to safe havens, especially sterling
NatWest Markets’ view More optimistic about emerging markets
Safe havens to perform well in 2020
In terms of currencies, the survey respondents prefer safe-haven markets
(such as the US dollar), as you can see from Figure 7. Sterling is expected
to be the best performing currency in 2020, with the Japanese yen, US
dollar and euro all preferred to emerging market foreign exchange (EM FX).
Figure 7: The best-performing currency in 2020 will be…
Source: NWM Investor Survey 2020
GBP
JPY
USD
EUR
High-yield EM FX
Asia FX
AUD or NZD
NOK
CAD
SEK
CEEMEA FX
0% 5% 10% 15% 20% 25%
Indeed, when asked to choose a favourite high-yielding EM FX, the third
most popular answer was ‘none’ (see Figure 8 on page 12).
Investor Survey 2020 | 11Foreign exchange
There is room for optimism outside of the G10
We are broadly more optimistic for riskier currencies and in emerging
markets than the survey, especially in the near term. We expect there will
be a rethink around the fundamentals and attractiveness of the US dollar,
and that asset allocation at the start of the year will help boost EM FX.
That said, we are more sceptical beyond the first quarter of 2020.
Figure 8: Favourite high-yield EM FX?
Source: NWM Investor Survey 2020
INR
BRL
None, they are all a sell
IDR
RUB
TRY
MXN
ZAR
0% 5% 10% 15% 20%
Investor Survey 2020 | 12Looking ahead
2020: The year ahead
Putting all of this together, one thing becomes clear: the NatWest Markets’
view stands in contrast to the consensus of the survey. Specifically:
• We are less pessimistic on the global growth slowdown, especially
in Europe. We believe the survey’s outlook for European growth is
unwarranted, especially given growth patterns over the last 27 years.
• When looking at the global political backdrop for 2020, our stance is to
take caution at this stage before making major calls on the outcome
for US-China trade tensions or the US presidential election. On Brexit,
we expect the government will ultimately agree a harder economic
settlement – one more in line with a Canada-style agreement, as
opposed to a Norway+ form of agreement.
“There is a clear view
• While there is a clear view in Europe that fiscal policy could, and in Europe that fiscal
should, do more to ease economic malaise, not many respondents
think fiscal policy is at a turning point. We expect the theme of policy
policy could do more to
divergence between monetary and fiscal policy in the US and Europe ease economic malaise”
to build in 2020.
What does this mean for markets?
Against this rather complex backdrop, we expect two key trends to
impact fixed income and currency markets. In the first, we expect fiscal
policy in Europe to impact German government bunds, with yields rising
and prices falling. Meanwhile, in Italy, we expect the opposite, with the
improving political environment seeing yields fall and prices rise. In terms
of currencies, we are broadly more optimistic about riskier currencies and
emerging markets than the survey, especially in Q2 of 2020.
Please see the Appendix on page 14 for the full set of survey results.
Investor Survey 2020 | 13Investor Survey
Appendix: Full survey results
Global macro questions
1. Global growth: what is the 7. Where will the Brent oil price
biggest upside risk in 2020? end 2020? (USD 59 per barrel
o Nothing, recession is coming at time of publishing)?
o Central bank easing o Above $80
o European fiscal policy easing o $70 – $80
o Brexit is concluded o $60 – $70
o US-China trade deal o $50 – $60
o Chinese stimulus o $50 – $40
o Other o Below $40
2. Chinese growth in 2020? 8. What will be the best
performing asset in 2020?
3. Euro area growth in 2020? o Alternative assets
(eg, rare whisky)
4. US growth in 2020? o EM equity/FI
o High-yield credit
5. Global inflation: what is the o High-grade credit
biggest upside risk in 2020? o Developed markets (DM) equities
o Nothing, deflation is coming o London property
o Nothing, no deflation but o Government bonds
inflation will be tame o Gold
o Wage growth o Bitcoin
o Populism
o Trade protectionism 9. Are you a buyer or seller
o Oil price spike of volatility in…
o A combination of all o G10 FX (buyer/seller)
o Other o EM FX (buyer/seller)
o Rates (buyer/seller)
6. Is monetary policy out of space? o Stocks (buyer/seller)
o No o Credit (buyer/seller)
o Yes, it can’t defuse the next
recession anywhere
o Yes, except in the US
o Yes, but fiscal policy will
come to the rescue
o Yes, the crisis that redefines
central banking is around
the corner
o Yes, the time has come for
Modern Monetary Theory
Investor Survey 2020 | 14Investor Survey
Global macro results
1. Global growth: what is the biggest upside risk in 2020?
Source: NWM Investor Survey 2020
45%
40%
35%
30%
25%
20%
15%
10%
5%
0%
US-China European Nothing, Central Brexit is Chinese Other
trade fiscal recession bank concluded stimulus
deal policy is coming easing
easing
2. Chinese growth in 2020?
Source: NWM Investor Survey 2020
35%
30%
25%
NWM
20% forecast
15%
10%
5%
0%
5.0 5.2 5.4 5.6 5.8 6.0 6.2 6.4 6.6 6.8 7.0 7.2 7.4 7.6 7.8 8.0
3. Euro area growth in 2020?
Source: NWM Investor Survey 2020
35%
30%
25%
NWM
20% forecast
15%
10%
5%
0%
-1 -0.8 -0.6 -0.4 -0.2 0 0.2 0.4 0.6 0.8 1 1.2 1.4 1.6 1.8 2
Investor Survey 2020 | 15Investor Survey
4. US growth in 2020?
Source: NWM Investor Survey 2020
35%
30%
25%
20%
15% NWM
forecast
10%
5%
0%
-1 -0.8 -0.6 -0.4 -0.2 0 0.2 0.4 0.6 0.8 1 1.2 1.4 1.6 1.8 2 2.2 2.4 2.6 2.8 3
5. Global inflation: what is the biggest upside risk in 2020?
Source: NWM Investor Survey 2020
35%
30%
25%
20%
15%
10%
5%
0%
but de tion ge pric
e
ulis
m atio
n er
ing, ion Tra nism bina Wa th Oil ke Pop defl Oth
th tio om ow g,
No eflat tec A c of all gr spi hin ing
no
d pro Not is com
6. Is monetary policy out of space?
Source: NWM Investor Survey 2020
35%
30%
25%
20%
15%
10%
5%
0%
No Yes, it can’t Yes, except Yes, but Yes, the Yes, the time
defuse the in the US fiscal policy crisis that has come
next will come to redefines for Modern
recession the rescue central Monetary
anywhere banking is Theory
around the
corner
Investor Survey 2020 | 16Investor Survey
7. Where will the Brent oil price end 2020 (USD)?
Source: NWM Investor Survey 2020
40%
35%
30%
25%
20%
15%
10%
5%
0%
Above $80 $70 – $80 $60 – $70 $50 – $60 $40 – $50 Below $40
8. What will be the best-performing asset in 2020?
Source: NWM Investor Survey 2020
Gold
EM equity/FI
DM equity
Government
bonds
High-yield credit
Alternative assets
(eg, rare whisky)
Investment-grade
credit
Bitcoin
0% 10% 20% 30%
9. Are you a buyer or seller of volatility in…
Source: NWM Investor Survey 2020
Buyer Seller
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
G10 FX EM FX Rates Stocks Credit
Investor Survey 2020 | 17Investor Survey
Global politics questions
1. Will Donald Trump be 4. Can the euro area survive
re-elected as US president? a recession?
o Yes o Yes
o No o Yes, questions will remain about
Italy but contagion is not a risk
2. Where will US-China trade o No, Europe is a crisis away
relations be by the end of 2020? from failure
o Relations worse (eg, tariff rates
will be higher than today, 5. What will be the likely outcome
addition of other measures such of a UK general election?
as capital restrictions, etc) (Question asked twice in Q4 2019)
o About the same (small deals/ o Large Conservative majority
deterioration but essentially (50+ seats)
little change) o Small Conservative majority
o Better (measured by a fair (~20 seats)
amount of reduction in tariff o Hung parliament
rates from current levels) o Labour-led coalition
3. Will the US intervene to weaken 6. What kind of deal will the
the USD between now and the UK leave the EU with?
end of 2020? o Norway+: single market
o Yes alignment and customs union
o No o Canada: a basic Free Trade
Agreement
o No deal/World Trade
Organization arrangements
o The UK remains in the EU
Investor Survey 2020 | 18Investor Survey
Global politics answers
1. Will Donald Trump be re-elected as US president?
Source: NWM Investor Survey 2020
68%
Yes No
32%
2. Where will US-China trade relations be by the end of 2020?
Source: NWM Investor Survey 2020
70%
60%
50%
40%
30%
20%
10%
0%
Relations worse About the same Better (measured
(eg, tariff rates will be (small deals/ by a fair amount of
higher than today, deterioration but reduction in tariff
addition of other essentially little rates from current
measures such as change) levels)
capital restrictions, etc)
3. Will the US intervene to weaken the USD by the end of 2020?
Source: NWM Investor Survey 2020
26%
Yes No
74%
Investor Survey 2020 | 19Investor Survey
4. Can the euro area survive a recession?
Source: NWM Investor Survey 2020
50%
45%
40%
35%
30%
25%
20%
15%
10%
5%
0%
Yes Yes, questions remain No, Europe is
about Italy but contagion a crisis away
is not a risk from failure
5. What would the likely outcome of a UK general election be?
Source: NWM Investor Survey 2020
70% Answered 18 – 27 October Answered 28 October – 5 November
60%
50%
40%
30%
20%
10%
0%
Large Small Hung Labour-led
Conservative Conservative parliament coalition
majority majority
(50+ seats) (~20 seats)
6. What kind of deal will the UK leave the EU with?
Source: NWM Investor Survey 2020
50%
45%
40%
35%
30%
25%
20%
15%
10%
5%
0%
Norway+: single Canada: No deal/ The UK
market alignment a basic World Trade remains in
and customs Free Trade Organziation the EU
union Agreement arrangements
Investor Survey 2020 | 20Investor Survey
Fixed income investor questions
1. What will be the best-performing 3. Where will US Federal funds
fixed income in 2020? be at the end of 2020?
o USTs o Below zero
o TIPS o 0 – 0.50
o EMU core/semi-core o 0.50 – 1.00
o Italy o 1.00 – 1.50
o UK Gilts o >1.50
o JGBs
o Sweden 4. 10-year USTs by the end of 2020?
o EM local currency bonds
o High-yield credit 5. 10-year bunds by the end of 2020?
o Investment-grade credit
6. 10-year BTP/bund spread by
2. Rank ECB president Christine the end of 2020?
Lagarde’s to-do list for 2020
o Rate cuts 7. 10-year Gilts by the end of 2020?
o Increase quantitative easing (QE)
o Change the issue/issuer limits 8. Best-performing inflation
o No more easing – fiscal policy breakevens in 2020?
must do the heavy lifting o US
o QE targeted at ‘quasi-fiscal’ o UK
schemes (eg, green QE) o EUR
o Encouraging single market o JPY
completion, banking union, etc
o Yield curve control
Investor Survey 2020 | 21Investor Survey
Fixed income investor answers
1. What will be the best-performing fixed income in 2020?
Source: NWM Investor Survey 2020
USTs
EM local
currency bonds
High-yield credit
Investment-grade
credit
Italy
TIPs
UK Gilts
EMU core/
semi-core
JGBs
0% 10% 20% 30%
2. Rank ECB president Christine Lagarde’s to-do list for 2020
Source: NWM Investor Survey 2020
Most likely
Least likely
Change No more Increase Rate Quasi- Encouraging
issue/issuer QE QE cuts fiscal single
limits schemes market
(eg, green completion
QE)
Yield
curve
control
Investor Survey 2020 | 22Investor Survey
3. Where will US Federal funds be at the end of 2020?
Source: NWM Investor Survey 2020
60%
50%
40%
30%
20%
10%
0%
Below 0 0.0% – 0.5% -0.5% – 1.0% 1.0% – 1.5% Above 1.5%
4. 10-year USTs by the end of 2020?
Source: NWM Investor Survey 2020
25% NWM
forecast
20%
15%
10%
5%
0%
0.2 0.25 0.5 0.75 1 1.25 1.5 1.75 2 2.25 2.5 2.75 3
5. 10-year bunds by the end of 2020?
Source: NWM Investor Survey 2020
35%
30%
25%
20%
NWM
15% forecast
10%
5%
0%
-1.5 -1.25 -1 - 0.75 -0.5 -0.25 0 0 .25 0.5 0.75 1 1.25 1.5
Investor Survey 2020 | 23Investor
slug here
Survey
6. 10-year BTP/bund spread by the end of 2020?
Source: NWM Investor Survey 2020
NWM
forecast
30%
25%
20%
15%
10%
5%
0%
50 75 100 125 150 175 200 225 250 275 300 325 350
7. 10-year Gilts by the end of 2020?
Source: NWM Investor Survey 2020
25% NWM
forecast
20%
15%
10%
5%
0%
-0.5 -0.25 0 0.25 0.5 0.75 1 1 .25 1.5 1.75 2 2.25 2.5
8. Best-performing inflation breakevens in 2020?
Source: NWM Investor Survey 2020
5% 11%
EUR
UK
US
24% JPY
60%
Investor Survey 2020 | 24Investor Survey
Currency investor questions
1. The best-performing currency 4. Where would you expect GBP/
in 2020 will be… USD to be three months after…
o USD o A no-deal Brexit
o EUR o A deal
o JPY o Article 50 revocation
o GBP
o SEK 5. EUR/USD by the end of 2020?
o NOK (1.1131 at time of publishing)
o AUD or NZD
o CAD 6. USD/CNY by the end of 2020?
o CEEMEX FX (7.0823 at time of publishing)
o Asia FX
o High-yield EM FX 7. Favourite high-yield EM FX?
o None, they are all a sell
2. The main driver of G10 FX o MXN
in 2020 will be… o BRL
o Relative growth o TRY
o Carry o ZAR
o Monetary policy trends o INR
o Politics/geopolitical developments o RUB
o Long-term (LT) valuation o IDR
o Momentum
o Positioning
3. Which of these factors is the
biggest downside risk for the
USD in 2020?
o Significant, proactive easing
by the Federal Reserve
o Unilateral US FX intervention
o The outcome of the US
presidential election
o Worsening debt and deficit
dynamics
o A meaningful recovery in
European economic activity
(Brexit resolution, fiscal stimulus)
o A meaningful recovery in Chinese
economic activity (US-China
trade deal, Chinese fiscal
stimulus)
o A major US equity market sell-off
o A US-China trade deal
o Other (please specify)
Investor Survey 2020 | 25Investor Survey
Currency investor answers
1. The best-performing currency in 2020 will be…
Source: NWM Investor Survey 2020
GBP
JPY
USD
EUR
High-yield EM FX
Asia FX
AUD or NZD
NOK
CAD
SEK
CEEMEA FX
0% 5% 10% 15% 20% 25%
2. The main driver of G10 FX in 2020 will be…
Source: NWM Investor Survey 2020
35%
30%
25%
20%
15%
10%
5%
0%
Politics Relative Monetary LT Momentum Carry Positioning
growth policy valuation
trends
3. Which of these factors is the biggest downside risk for USD in 2020?
Source: NWM Investor Survey 2020
30%
25%
20%
15%
10%
5%
0%
eas
ing tion ll-o
ff eco
n
cit eal n
eco Other
ed S elec y se UR /defi rad
ed hina
t F f U uit in E ebt a t C
an eo eq ry d
Chi
n y in
nific com jor
US ove sen
ing
US- ver
Sig Out Ma Rec or A R eco
W
Investor Survey 2020 | 26Investor Survey
4. Where would you expect GBP/USD to be three months after…
Source: NWM Investor Survey 2020
45% No-deal Brexit A deal Article 50 revocation
40%
35%
30%
25%
20%
15%
10%
5%
0%
1 1.05 1.1 1.15 1.2 1.25 1.3 1.35 1.4 1.45 1.5
5. EUR/USD by the end of 2020?
Source: NWM Investor Survey 2020
30%
25%
NWM
20%
forecast
15%
10%
5%
0%
0.9 0.925 0.95 0.975 1 1.025 1.05 1.075 1.1 1.125 1.15 1.175 1.2 1.225 1.25 1.275 1.3
6. USD/CNY by the end of 2020?
Source: NWM Investor Survey 2020
NWM
18%
forecast
16%
14%
12%
10%
8%
6%
4%
2%
0%
6.5 6.55 6.6 6.65 6.7 6.75 6.8 6.85 6.9 6.95 7 7.05 7.1 7.15 7.2 7.25 7.3 7.35 7.4 7.45 7.5
Investor Survey 2020 | 27Investor Survey
7. Favourite high-yield EM FX?
Source: NWM Investor Survey 2020
INR
BRL
None, they are all a sell
IDR
RUB
TRY
MXN
ZAR
0% 5% 10% 15% 20%
Investor Survey 2020 | 28Investor Survey
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