Global | Holding on to our core convictions
Despite a flattening of the yield curve and some position squaring of the socalled reflation trade, we believe our key asset allocation themes are still broadly intact after the Fed’s hawkish tilt last week.
In particular, we see renewed curve steepening from here, but focused mainly on the longer end of the curve, and moderate US Dollar weakness
Developments, however, point to a less aggressive view on the end point for the US 10 year Treasury yield, amid a surge of buying from the foreign official sector, as well as the gravitational pull from other core government bond yields.
This should be enough to maintain the reflation trade within equities. Although positioning towards short duration sectors appears stretched and therefore vulnerable to a further near-term unwind, fundamentals remain supportive of medium-term outperformance.
Nordics: Key themes 2024 – Light at the end of the tunnel
The rapid surge in interest rates will continue to weigh on the Nordic economies next year with little external support, but it's not all gloom with inflation easing and some pockets of strength. We think four themes will be key in charting the outlook for Nordic economies in 2024:Find Out More
Emerging Markets forecast issues – Policy easing faces stronger headwinds
In our latest monthly forecast, we raised our aggregate 2023 GDP growth forecast for emerging markets (EMs) by 0.1ppt to 4.1%. We raised our 2023 GDP growth forecast for China by 0.1ppt to 5.2% after a slight outperformance in Q3, consistent with the official growth target of “around 5%". We maintain our 2024 aggregate EM growth forecast at 3.6%.Find Out More