Barclays_Global_Portfolio_Manager_s_Digest_Tricks_of_the_Trade

This document is intended for institutional investors and is not subject to all of theindependence and disclosure standards applicable to debt research reports prepared for retailinvestors under U.S. FINRA Rule 2242. Barclays trades the securities covered in this report for itsown account and on a discretionary basis on behalf of certain clients. Such trading interestsmay be contrary to the recommendations offered in this report.Barclays Capital Inc. and/or one of its affiliates does and seeks to do business with companiescovered in its research reports. As a result, investors should be aware that the firm may have aconflict of interest that could affect the objectivity of this report. Investors should consider thisreport as only a single factor in making their investment decision.* This individual is a member of the Product Management Group and is not a Research AnalystAll research referenced herein has been previously published. You can view the full reports,including analyst certifications and other required disclosures, by clicking the hyperlinks in thispublication or by going to our Research portal on Barclays Live.FOR ANALYST CERTIFICATION(S) PLEASE SEE PAGE 37.FOR IMPORTANT EQUITY RESEARCH DISCLOSURES, PLEASE SEE PAGE 37.FOR IMPORTANT FIXED INCOME RESEARCH DISCLOSURES, PLEASE SEE PAGE 38.Global Portfolio Manager's DigestTricks of the TradeWe provide context and perspective on research across regionsand asset classes, this week highlighting our analysis of theeconomic impacts of a potential global trade war; keytakeaways from the Barclays Global Financial ServicesConference; and our latest FX & EM Macro Strategy Quarterly.• Impacts of a Global Trade War: In our view, US tariff increases to 60% and 10% on goodsimports from China and the RoW, respectively, as proposed by former President Trump,would be a significant escalation of trade restrictions. Assuming symmetric retaliation fromall US trading partners, but accounting for different confidence effects, we estimate the effecton the level of real GDP to be -2.0%, -1.4%, and -0.7% for China, the US, and the euro area(EA), respectively, in the first 12 months. Inflation would rise in the short run, especially in theUS, by around 0.9pp, by our estimates, as the negative supply shock from higher tariffsincreases prices. US monetary policy would initially likely remain slightly tighter than in ourbaseline of no tariff increases, as inflation rises. But as activity starts weakening, amid tradepolicy uncertainty and tighter financial conditions, we would expect the Fed to ease policyrates more aggressively, possibly as much as 100bp. For the larger and more closed USeconomy, the negative short-term effect would also likely more easily dissipate in thefollowing years. It could be more persistent for the more export-dependent China, EA, andsmall open EM economies, especially if global trade tensions were to escalate beyond theinitial US tariff increases.• Global Financial Services Conference Takes: