Overview: Global growth picking up at the end of the year We have lifted our world GDP growth forecasts for both 2016 and 2017 by 0.1 percentage points, to 2.3% and 2.7% respectively. And we have raised our 2018 world growth forecast from 2.7% to 2.9%, mainly on the back of a significant upgrade to our US outlook. Global indicators point to a pick‐up in activity in Q4. The global manufacturing PMI rose to a 27‐month high in November, while the composite index – which includes services – was at its highest level for a year. Indicators of international trade continue to paint a mixed picture. Global trade volumes declined slightly over the previous month in September but that came after a strong gain in August, and it looks like the trough in the world trade cycle has been passed. We expect a gradual strengthening in world trade over the next couple of years provided president‐elect Trump do not follow through on his protectionist threats. Trade should be underpinned by stronger growth in the US: we have lifted our 2017–18 growth forecasts to 2.3% and 2.5% respectively (from 2% and 1.9%). Our more bullish stance is driven by the anticipated effects of president‐elect Trump's expansive fiscal policies and his less protectionist tone. Tax cuts and business deregulation could also unleash investors' ‘animal spirits’, helping offset the effects from a stronger dollar and heightened policy uncertainty. Stronger growth means that, in addition to a nearcertain hike in December, we now see the Fed raising interest rates twice in 2017 and three times in 2018. This, in turn, is reflected in a steeper yield curve for government bonds than previously expected. This will also pose higher risks for emerging markets that remain exposed to capital outflows and are vulnerable given their stock of US$ denominated debt. Countries with large current account deficits such as Turkey and South Africa are likely to be most affected Economic activity in the Eurozone remains resilient to the shocks of recent months. Following the ECB's announcement of an extension of its QE programme and increasing divergence between monetary policies compared to the US, we now see the euro falling to parity against the US dollar by the end of 2017.