Welcome to Thoughts on the market. I'm Matt Hornbach, Global Head of Macro Strategy for Morgan Stanley.

Along with my colleagues bringing you a variety of perspectives, I'll be talking about global macro trends and how investors can

interpret these trends for rates and currency markets. It's Thursday, April 30th at

10 a.m. in New York. Although this is my first episode guest hosting thoughts on the market, I'm going to use it to express

a view that admittedly may open me up to a bit of scorn.

And that's a forecast for a weaker U.S. dollar. Before you react, believe me, I understand the skepticism,

especially given recent investor appetite for the US dollar.

Consensus on the dollar has been bearish for years, only to be proven wrong again and again.

Critics say, okay, suppose you want to sell the dollar? What on earth are you going to buy outside of the U.S?

For the record, I'm not suggesting investors buy the euro.

Our forecast is based on the simple interplay of supply and demand.

Prices of any financial asset, whether they be real estate, oil or equities, reflect this simple relationship.

Currencies are no different. In order to forecast prices, we have to analyze and predict the path of both supply and demand regardless of their history.

First, let's start with the future demand for US dollars.

When we consider the outlook for global growth today, we see a broad rebound occurring over the next year.

Although we're projecting a decline in global real GDP growth

to negative 6.1% in the second quarter,

our economists are projecting a snap back to about 10% this time next year.

This projected growth inflection stands in stark contrast to the recovery after the great financial

crisis, where global growth rebounded to just about 5.5%.

While that rebound occurred from a shallower trough and uncertainty naturally remains high

around these forecasts, this snapback suggests that the demand for US dollars could

...