Central bankers across the world are set to fill up the proverbial punch bowl, but it may not juice stock markets much.
That’s according to a new strategy note from Deutsche Bank, which outlined what it expects major central banks around the world to do in the coming months.
| Central bank | Expected action |
| U.S. Federal Reserve | Three cuts in 2019 |
| European Central Bank | 10-basis-point cut in September and December, maybe more QE and “tiering” in September |
| Bank of Japan | On hold with no changes in target yields possibly into 2020 |
| Bank of England | No hikes until August 2020 |
| People’s Bank of China | To cut open market operations rate by 10 to 50 basis points, and one reserve requirement ratio cut |
| Emerging markets | Cuts coming in Russia, South Africa, Turkey, India, Indonesia, Philippines, Vietnam, Brazil and Chile |
Related: It’s the ECB’s turn to take a step toward further easing when it meets Thursday
That should help limit slowing growth momentum, and Deutsche Bank sees world growth of around 3.2% this year. The monetary-policy actions, the Deutsche Bank strategists say, should allow for “cautious” near-term growth, as the central-bank easing counteracts political and trade headwinds.
Related: IMF cuts its global growth forecast again
Equity markets already are pricing in a strong rebound in growth, limiting the potential for upside.
This year, the Dow Jones Industrial Average DJIA, -0.47% has gained 17%, the S&P 500 SPX, +0.03% has jumped 20% and the Nasdaq Composite COMP, +0.24% has risen 24%.
The Deutsche Bank strategists also don’t see much movement in either Treasurys TMUBMUSD10Y, -1.39% or German bunds, expecting them to trade close to flat from current levels.
They’re “strategically bullish” on the euro EURUSD, -0.0807% and the yen USDJPY, -0.11% but neutral on the U.S. dollar DXY, -0.05% .