Pimco, the investment-management firm, has released its latest cyclical outlook for the global economy during the next 12 months.

The firm’s outlook, which is released three times per year, “analyzes business cycle dynamics across major developed and emerging market economies with an eye toward identifying potential changes in monetary and fiscal policies, market risk premiums and relative valuations that drive portfolio positioning.”

In “Cyclical Outlook: Scaling Back,” Joachim Fels and Andrew Balls scaled back the firm’s expectation on four things:

The risk of a full-blown trade war. A major political “accident” in China. Nationalist and anti-European victories in coming elections in France and Germany. Near-term inflationary pressures in the US.

Fels and Balls added that they were more bullish on gross-domestic-product growth than they were when they wrote the most recent cyclical.

“While back in December we forecast 2017 world GDP growth averaging 2.5%-3.0%, we now expect growth to be in a 2.75%- 3.25% range this year, up from 2.6% in 2016,” they said.

Below are the slides from their presentation to clients:

Postelection euphoria has calmed down a bit.

There's still some risk out there — but not too much.

The global economy is projected to grow 3.0% over the next 12 months.

The chances of a "full-blown trade war" seem less likely.

The Chinese government seems to be sitting on its hands.

The Bank of Japan will most likely see its balance sheet continue to increase.

The firm is less concerned about key political elections on the horizon.

It looks less likely that Marine Le Pen, the populist candidate in the French election, will be able to clinch the presidency.

Here's the timeline for Britain's exit from the European Union.

There's a possibility European peripheral spreads will widen again.

The firm's keeping an eye on the "oldest mortgage market" in the world.

Insurance is always important.

Federal Reserve rate hikes will most likely beat market expectations.

Ten-year yields are on the upswing.

The US dollar's upward march pulled back a bit.

Emerging markets will witness "moderate growth returning as their deep recessions end."

Pimco's advice for investors: "Be patient."

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