The 2014 Scotiabank Economic and Market Outlook Conference (EMOC) today offered a measure of optimism to investors.

“Global economic activity remains highly uneven, with U.S. consumers getting back in a spending mood and Europe showing signs of crawling out of a lengthy recession just as China and some other new world powerhouses are losing momentum,” said Warren Jestin, senior vice president and chief economist, Bank of Nova Scotia.

“From a Canadian perspective, the cyclical recovery of U.S. consumer spending and the prospect of a comprehensive trade deal with Europe are positive for exporters.”

“On a longer-term basis, the real game changer in terms of opportunity is the rapid emergence of domestic demand in Asia and Latin America,” added Jestin.

“These nations are making the transition from world-class producers to consumers at an astonishing rate and will account for an increasing share of global economic activity over the balance of the decade.”

Jestin was joined at the conference by some of Canada’s leading authorities, as Scotiabank’s Camilla Sutton, chief currency strategist, and Vincent Delisle, managing director, portfolio strategy group, also shared their insights and forecasts. Myles Zyblock, chief investment strategist, 1832 Asset Management L.P., served as moderator.

“The core foreign exchange theme over the next six months is likely to be a broadly stronger U.S. dollar,” said Sutton. “The Canadian dollar is expected to depreciate as the Bank of Canada strikes a dovish tone and pushes out expectations for higher interest rates just as the Federal Reserve begins to taper its bond buying program.”

Delisle added: “Accelerating world GDP growth and Fed tapering should drive portfolio returns in 2014. We expect: improving economic news flow to bolster sentiment and equity flows; the upward normalization in bond yields to continue; monetary divergence to drive country-asset leadership; and sector correlations to mean-revert lower.”