US | Positioning for rate normalisation
We see the strong pull back in long-term US yields since the peak of the reflation trade this year as an opportunity to enter new positions that capitalise on future macro trends driven by mid-cycle dynamics.
The recent price action means we are now ready to tactically enter trades which will benefit from sustained global growth as we go into 2022.
We telegraphed that the recent June Fed hawkish tilt would lead to a prospectively lower inflation risk premium, but we now believe this has largely played out in fixed income markets
We think the market has downwardly re-priced the Fed funds terminal rate too aggressively, and we see an uptick in the terminal rate from here.
Slowdown in 2023, except for Chinese cities
Growth across advanced Asia Pacific cities is slowing down in 2022's second half, and their full-year growth rates will trend downwards in 2023. In emerging Asian cities, we expect an uptick in growth in 2022, followed by a marked weakening in 2023.Find Out More
European cities face a tough winter as recession spreads
Strong annual GDP growth figures for most major European cities do not tell the whole story in 2022 as the economic environment across Europe has continued to deteriorate in the second half of this year. We expect technical recessions across most major European cities in H2 2022 and into Q1 2023.Find Out More