UK: In its World Economic Outlook released on Monday, Deutsche Bank predicted that a bear market rally in equity markets would last into next year before crashing into a global recession.

The S&P 500 (.SPX) is projected by the German bank to rise to 4,500 before reversing in the first half of 2019. The broad index of US stocks, which hit its lowest level in October, closed at around 4,026 on Friday and has gained about 15% since then.

As of the 2023 outlook, a recession is likely to begin around the middle of the year and affect credit markets, where higher yields in the US should spread to 860 basis points by year-end and reach 930 in the euro.

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A recession and the end of the US tightening cycle were seen as better for Treasury bonds, with the 10-year yield expected to be at roughly the same level by the end of 2023, at 3.65% now. However, German bunds were seen to underperform, with the 10-year yield rising from around 1.96% to 2.60% over this time.

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Finally in forex, we see a reversal in the uptrend in the dollar, according to Deutsche Bank analysts, with the euro/dollar moving firmly back above 1.10 and possibly reaching 1.15 by the end of 2023.

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With regard to oil, he said Brent crude prices could rise to $100 in the first quarter of 2019, falling to $80 by the end of the year due to supply disruptions.