“With softer economic growth ahead and the Fed expected to cut rates in 2024, this supports our positive stance on developed and emerging market bonds.”
- We expect soft global economic growth in Emerging Markets, with Asia in particular, to remain the growth engine.
- In November, government bonds are back in positive territory YTD (despite a recent pause) and equities are posting strong performances.
- A pause, followed by cuts from the Fed bode well for government bonds both in Developed and Emerging Markets.
Last week business surveys in the Eurozone and macroeconomic data in the US (durable good orders) confirm our soft global economic outlook for 2023. In our just released Investment Outlook for 2024, we expect a global slowdown, with Emerging Markets set to remain more resilient compared to Developed Markets (DM). Asia will be the global growth engine and is expected to contribute for around 2/3 of global growth in 2024. Inflation is a key variable to watch in 2024. We see it moderating and leading DM central banks to start cutting rates later in 2024. Against this soft outlook, fixed income is king and is our main conviction for 2023 year-end and H1 2024. For 2024 we see opportunities to rotate towards equity, credit and Emerging Markets when Central Banks start cutting rates.
You can now read the full whitepaper at the link below
