April Global Macro Monthly - Inflation to rise, but how fast and for how long?

---

Key points

• Virus and vaccines continue to drive growth outlooks. China saw a slower first quarter, but we raise our annual outlook. The Eurozone faces several downside risks, but the outlook is brighter in the UK. Emerging market developments are mixed.
• US activity has also been supplemented by additional fiscal stimulus. We raise our annual growth forecast again. Yet inflation is only expected to rise gradually to target after volatility in 2021.
• The Fed has convinced markets of long-term accommodation for now. The European Central Bank continues to deliver faster Pandemic Emergency Purchase Programme purchases.
• Bond yields have fallen despite ongoing fundamental concerns, in part reflecting the cost of short positions. This has also allowed a bounce in EURUSD. Credit markets have proven a good steer to equity markets and continue to suggest supportive risk outlook.