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Q1 Economic Outlook highlights include:

• In the first quarter of 2021, lockdowns around the world were extended while Covid-19 vaccination programs started up. Setbacks in the delivery and production of vaccines are a major hurdle for the economy to turn back to normal.
• Equity markets reached new all-time highs, and are anticipating recovery as a return to normal is in sight. Going forward, the Ortec Finance Momentum Indicator signals equity markets to lose momentum in the coming year.
• In the first quarter of 2021, economic activity again improved stronger than anticipated detracting from future recovery potential. Consequently, the outlook of the Ortec Finance Business Cycle Indicator worsened. Supported by the ongoing extensive fiscal and monetary stimulus, we assume that the global economy continues its recovery in the course of 2021.
• With a potential end of the pandemic in sight, markets worry that increased demand and economic stimulus will start to drive inflation. Accordingly, yields on long term bonds rose substantially this quarter. Although we do recognize the risk for higher inflation, we expect, in line with central banks, inflation not to overshoot, and not to be sustainable above central bank targets in the coming years.
• The pandemic’s economic impact still remains uncertain and the economic recovery remains fragile. Also, we expect market volatility to remain elevated.