While there is much discussion about the timing and pace of the monetary normalisation in the US, there has been less focus on potentially positive turning points in the world economy. After a long period of disappointments, a nascent recovery in the US economy could allow the US to be the global locomotive to drive a broader global rebound. This is important because if global demand is improving, Asian economies are likely to be more resilient to developments such as higher US interest rates. Indeed, if the world economy picks up steam well ahead of expectations, it could also mean that the Fed might be hiking rates faster than expected.

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