Forecasts Quarter 2 2023

Global Economic Outlook

• The banking sector flare-up in March has introduced new uncertainties within the pre-existing growth slowdown narrative. Overtightening risks now more acute.
• Liquidity withdrawal and demand slowdown accentuate the unfolding global disinflation, facilitating a policy pivot towards lower rates.

Emerging Markets Outlook

• Mixed performance likely across EM economies, with a China reopening rebound being a key performance driver.
• China’s reopening should boost EM growth performance, but risks remain.

Global Capital Markets

• There is often information to be learned from the behavior of crowds and we think that excessive bearish sentiment is likely one of the factors underpinning equity market resilience today and in the near term.
• Cash and fixed income assets largely look attractive from a cross asset valuation perspective, but sharp re-pricings in the expected level of interest rates suggest future gains may be harder to come by.