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Operating environment

Report on expected developments – developments in the operating environment

Macroeconomic environment

With global economic growth already slowing during the course of 2018, inflation rising, and monetary policy becoming more restrictive (especially in the US), Deutsche Börse Group expects a further weakening of global growth during the forecast period. The ongoing trade conflict, mainly between China and the US, pressure on emerging markets due to the tighter US interest rate policy, the appreciation of the US dollar, as well as the political situation in Europe, especially with regard to the imminent exit of the United Kingdom from the European Union, are some of the reasons. Against this background, uncertainty should increase among market participants, and market volatility could rise temporarily. A settlement of the trade dispute, a stabilisation of the political situation in Europe, and a clear direction in the central banks’ monetary policy would have a stabilising effect on markets and a positive impact on economic growth. Regarding interest rate trends, the Group does not expect to see any fundamental departure from the current low interest rate policy in Europe. While the ECB terminated its bond-buying programme at the end of 2018, the central bank also promised that deposit rates would remain at a level of –0.4 per cent at least until the summer of 2019. The US Fed continued its policy of gradual interest rate hikes in 2018, indicating further increases may be possible in 2019 – provided that the economy (and inflation) accelerate further.

In its economic development forecast published in January 2019, the International Monetary Fund (IMF) predicted economic growth of around 1.6 per cent in the euro area and growth of 1.3 per cent in Germany for the year 2019, i.e. now expecting significantly lower growth than in October 2018. Expectations for the United States are higher than for the euro area: the US economy is forecast to grow by around 2.5 per cent. The highest economic growth by far in 2019 – approximately 6.3 per cent – is anticipated again in Asian countries (especially India and China), due to expected strength in domestic demand. Given the extremely varied estimates for the different economic regions, global economic growth is projected to be around 3.5 per cent in 2019.

Regulatory environment

Governments and central banks have been working to enhance regulation of the financial markets since 2008, so as to stabilise the financial sector and prevent future systemic crises. The initiated measures (in some cases already implemented) range from revising the legal framework for banking business and capital adequacy requirements, through rules for clearing over-the-counter (OTC) derivatives transactions, down to improving financial market supervision (for more information, please see the “Regulatory environment” section of the report on economic position). For Deutsche Börse Group itself, the various regulatory projects will have both positive and negative consequences. Overall, however, the Group sees the changing regulatory environment as an opportunity to expand its business further; see the report on opportunities for further details.