For 2021, we anticipate the confluence of four broad themes; a multi-speed growth normalization, slow moving inflation, accommodative central banks and the China anchor steering the broad macro contours.

 The intersection of these themes, in our view, will likely lead to growth reflation without the inflation that typically accompanies a late cycle expansion.

 We expect the following themes to evolve as follows: First, the normalization of domestic and global activity should lift all boats. We expect that the vaccine will lift service exports in 2H21. In response, we expect some paring back of fiscal policy.

 Second, despite the cyclical lift, we expect modest spillovers into labor markets reflecting ongoing slack amid a multi speed recovery. This should result in a modest and gradual rise in underlying inflation, though an unexpectedly sharp rise in supply side prices would be a risk to this view.

 Third, the combination of a modest rise in core inflation and easy external financial conditions suggests a monetary pause that could extend through 2021.

 Fourth, ongoing opening up of its capital markets and currency flexibility should continue to position China as a regional anchor. RCEP adds to the deepening of regionalization.

 Even as the region recovers, US-China trade tensions remain.