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CONTRIBUTORS

Michael Hasenstab, Ph.D.

Portfolio Manager, Chief Investment Officer, Templeton Global Macro®

Calvin Ho, Ph.D.

Portfolio Manager, Director of Research, Templeton Global Macro

Key takeaways

͏͏͏͏͏November overview: Even as more tariff packages are finalized, the situation remains fluid. The US government shutdown ended on November 12, but the effects will likely be felt for some time yet. Some US data has been delayed or will not be released at all due to the shutdown, adding uncertainty to assessing economic conditions. Global growth-related releases mostly remained relatively resilient even as risks remain elevated, but Japanese growth fell amid payback from previous front-loading. Inflation data in developed economies generally confirmed some pricing pressures creeping back into the data, though inflation is mostly more contained among a variety of emerging markets (EM). It was a quiet month for developed market monetary policy activity, while some EMs eased rates further. The US dollar (USD) was modestly weaker in November, appreciating against most Asian currencies but generally weaker against others. Bond yields were mixed during the month.    

Outlook: Uncertainty remains elevated in the shorter term, as final tariff levels are still not decided for a number of countries and the Supreme Court is due to rule on the legality of tariffs imposed by the president rather than Congress; the ruling may take some months yet. Over the medium term, our focus for investment revolves around our assessment of “global rewiring”—evolving patterns and relationships that we anticipate affecting certain economies and markets for some time to come. Such rewiring could cover relationships between countries or developments within particular regions or economies. Our core themes of improving EM fundamentals, USD weakening and geopolitically induced shifts in global supply chains remain intact. Risks from US tariff and trade policy encompass growth, inflation and/or geopolitical implications and vary by country. Domestic political developments in some countries raise fiscal and other policy concerns.  

Continue reading further by downloading the PDF, which highlights the Templeton Global Macro team’s market and economic overview, and outlook for the month.

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All investments involve risks, including possible loss of principal. Past performance is no guarantee of future results. Please note that an investor cannot invest directly in an index. Unmanaged index returns do not reflect any fees, expenses or sales charges.

Fixed income securities involve interest rate, credit, inflation and reinvestment risks, and possible loss of principal. As interest rates rise, the value of fixed income securities falls. Low-rated, high-yield bonds are subject to greater price volatility, illiquidity and possibility of default.

Sovereign debt securities are subject to various risks in addition to those relating to debt securities and foreign securities generally, including, but not limited to, the risk that a governmental entity may be unwilling or unable to pay interest and repay principal on its sovereign debt.

Changes in the credit rating of a bond, or in the credit rating or financial strength of a bond’s issuer, insurer or guarantor, may affect the bond’s value.

International investments are subject to special risks, including currency fluctuations and social, economic and political uncertainties, which could increase volatility. These risks are magnified in emerging markets. Investments in companies in a specific country or region may experience greater volatility than those that are more broadly diversified geographically. The government’s participation in the economy is still high and, therefore, investments in China will be subject to larger regulatory risk levels compared to many other countries.

Currency management strategies could result in losses to the fund if currencies do not perform as expected.

Concentrations of certain securities, regions or industries is subject to increased volatility. Investment strategies incorporating the identification of thematic investment opportunities, and their performance, may be negatively impacted if the investment manager does not correctly identify such opportunities or if the theme develops in an unexpected manner.

Diversification does not guarantee a profit or protect against a loss.

WF: 7694210

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