The raft of GDP data released this month showed that regional growth slowed to just 0.3% y/y in Q1 (from 1.0% y/y in Q4), the weakest pace in two years. While it doesn’t look like sluggish growth will prompt an immediate shift towards interest rate cuts, central banks have started to sound more dovish. The softness of the economic data support our view that monetary policy will be looser over the coming 6-12 months than financial markets are pricing in.
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