The House View: Snapshot: 1999 meets 1990

Research evidence excerpt

The House View: Snapshot: 1999 meets 1990

Research

The House View: Snapshot

1999 meets 1990

Deutsche Bank

Macro views

United States World

❑2026 growth is projected at 2.2%, supported by easy financial ❑Global growth at 3.0% in 2026 and 3.2% in 2027.

conditions, fiscal support and AI-driven capex.

❑Rationale: A US-Iran deal may be possible in June, which

would reopen the Strait of Hormuz and see Brent crude ❑Rationale: Labor market has stabilized and we expect this to

fall to $86/bbl in Q4 and $80/bbl in 2027. Current AI persist with unemployment near recent levels into year-end

boom is also buffering the US and North Asia from the ~4.3%. PCE inflation forecast has risen to 3.3% YE given recent

energy shock. outperformance and lift from energy prices.

❑Key risks: War continues/worsens, oil market impact ❑Key risks: A more substantial oil price shock could weaken real

from prolonged Strait of Hormuz closure; AI sell-off disposable income; financial conditions might tighten,

sparks major market rotation. Upside risk is that there is perhaps driven by concerns around AI disruption or (private)

further momentum from AI adoption/investment. credit risks.

Europe Germany

❑2026 growth cut to 0.5%. Technical recession cannot be ❑0.5% GDP in 2026 & 1.3% 2027. Fiscal deficit to widen to

ruled out; recovery expected from Q4, with 2027 growth 4.1% of nominal GDP upon weaker growth.

of 1.1%.

❑Rationale: Cost-related headwinds and inflation induced

❑Rationale: The energy shock has significantly impacted weakening of private consumption to persist into H2 2026.

European activity. Fading energy shock effects and The expected normalization of the global environment,

Germany’s fiscal spending (defence and infrastructure) combined with the domestic fiscal stimulus, should boost