In 1998 global demand weakened, while global supply increased - global deflation thus intensified.
Low inflation means low interest rates.
Asian cyclical outlook has improved due to easier monetary and fiscal policies - economic data likely to improve markedly in 1999. But Asian financial and corporate restructuring is very slow, inhibiting sustained profit recovery. Worst is past, but Asia not a positive for global activity. New European Central Bank may need to reduce rates further to solidify EU growth in 1999. The creation of the Euro represents a huge change to the global financial achitecture.