2018 ANNUAL OUTLOOK 2018 ANNUAL OUTLOOK

2018 ANNUAL OUTLOOK

Exploring the Global Economy in 2018

As an international bank we cross boundaries – geographically and in our approach to product development. We believe that the best way to serve your needs is to constantly respond to changing market conditions and sentiment, developing products that suit and adapt to our global client base.

Product expertise is one of our key strengths and we are able to harness not only the vast experience of our Relationship Managers, but the entire resources of Citi, one of the world's largest and most trusted financial services institutions.

Market Research and Product Development

Our experts understand global economic trends and movements and analyse the markets on a continual basis. This research and development work is shared with you through our range of products that include news, analysis and in-depth focus articles, all available to you online.

We continually research the markets to ensure that the products we offer are among the best in the world, and we forge partnerships with leading providers to ensure you have competitive options available. For example, through Citi you can access over 450 Mutual Funds from some of the world's leading investment fund companies.

Our range of financial products is diverse and it is continually changing as we are dedicated to meeting all of our clients' changing needs.

What we offer

Time Deposits for those who want secure, high rate savings in a range of currencies.

Structured Notes for clients with an investment appetite and who prefer a product where the principal can be protected.

Our range of Mutual Funds is huge, - at 450, and we offer investments from low-risk government bonds to specific sectors or regional funds to suit all risk profiles.

You can also trade equities and bonds across 25 countries with our International Brokerage service, available on a non-advisory basis.

Our product guide explains the full range of wealth management products we have available.

When it comes to day-to-day banking we provide facilities such as our offshore Multi Currency Cash Accounts and global transfers, which make accessing your money easy from wherever you are in the world.

Wealth management experts

As a Citi client you have access to and the support of a dedicated Relationship Manager who is invariably from your country and speaks your language.

As fully qualified wealth management experts, they can give you expert and personalised advice on investment opportunities, helping you devise a portfolio that meets your exact requirements. They are also experienced in helping clients create products for their individual needs (for example if you need a Structured Note that gives you a higher return but with less protection of your principal), as well as designing products over different terms.

While Citi analysts maintain their forecast for three rate hikes in 2018, they now expect three hikes instead of two in 2019.

The unexpected stimulus from the recent US budget deal has led Citi to raise its US real GDP growth forecast for 2019 from 2.4% to 2.8%. Citi analysts now see stronger growth, a lower unemployment rate and at or slightly above target inflation in 2019.

  • According to Citi analysts, a high growth and higher inflation environment results in lower but still positive returns from bonds and equities, higher market volatility, a weaker dollar and stronger commodities. See table. Strategies for a High Growth, Higher Inflation World
  • As such, investors may want to stay invested but expect returns to be more modest, especially when compared to last year's gains. Citi analysts continue to expect robust global real GDP growth of 3.4% in 2018 and have just raised their 2019 global GDP growth forecast up 0.1% to 3.4%. This is expected to help drive corporate profits over the next 1-2 years.
  • Investors may also want to consider gaining exposure to strategies that are positioned for rising volatility. Macro trading strategies may also perform well.
  • A weaker dollar is potentially positive for Emerging Market (EM) assets. EM is expected to benefit from robust global trade, synchronized growth as well as supportive commodity markets. Citi analysts are positive on EM equities as well as bonds (local currency and USD denominated).
  • Within EM bonds, Citi analysts favour Latin America bonds given higher commodity prices, stronger growth, favorable currencies and higher yields, although upcoming elections in Brazil and Mexico may lift volatility. Over in India, despite the challenges from higher inflation and a widening fiscal deficit, Citi analysts believe that 5-year Indian local currency yields at 7.5% are attractive. Citi also sees long term potential in local Chinese bonds as the onshore bond market becomes more accessible to foreign investors.
  • Investors can also consider gaining some exposure to commodities, in particularly industrial metals. Metals have historically performed well in a rising growth and inflation environment.

Views from Citi Analysts on the fundamental changes in the global economy in 2018.

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A weekly review of the FX market and a preview of likely developments.

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Weekly report on the movements and drivers across the FX, Fixed Income and the Equity and Commodities markets.

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A monthly analysis of key economic topics.

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Our Mid-year Outlook Report: Seven things investors need to know.

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