Watch Alex Bellefleur's Q4 Market Outlook

Alex Bellefleur: Factory data around the world has slowed down considerably.  This has been especially visible in purchasing manager indices which tracks sentiment along goods-producing companies.

Europe and Asia had already been in slowdown mode in 2018 and the beginning of 2019, but now, the United States has also begun to slow down, while it had, so far, been a more resilient economy.

In response, central banks around the world have stepped up monetary easing; they have resumed balance sheet expansion, and they've also cut interest rates.  So, bond markets have reacted very favourably to that.

Meanwhile, equity markets have been stuck in this tug of war between deteriorating growth, which is a negative factor, and falling interest rates, which is a positive factor.

Both bond and equity markets have had a great run so far in 2019 as the fall in interest rates benefited both asset classes.

In terms of potential surprises going forward, we think they can come from either better than expected growth around the world or from more accommodative than expected monetary policy.  We certainly think the latter is a possibility as we head into 2020. 

In the very short run, though, the Fed typically tends to stay quiet ahead of big political events such as presidential elections in the U.S., but going deeper into 2020, we certainly think there's a chance that policy may turn out to be more accommodative than is currently priced in.  This would help a variety of economies around the world such as the emerging economies which have suffered in the last few years from the rise in U.S. interest rates.

I think political risks remain front and centre at the moment.  The U.S.-China trade issue is likely to remain very important heading into the fourth quarter, as it remains unsolved to date, but also, the rhetoric surrounding the U.S. presidential election is going to heat up in the fourth quarter and in the first quarter of 2020.

The markets will begin to price in different scenarios as to who might be the Democratic candidate and who might get elected or who might remain president in 2020, and if we couple these political risks with the slowdown in manufacturing data that we've seen in the United States, this is likely to generate some headline risk in the next few months.