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Market Forecasts: Q1 2024

The global economy is set to slow amid ongoing disinflation, but the shift to more dovish central bank messaging lessens the chances of a recession in 2024.

Chief Economist
Portfolio Manager

Global Economic Outlook

  • The path to a soft landing seems more viable, with recession risks easing somewhat. But the effects of earlier tightening policy are still working through the system even as central banks embrace easier policy in 2024.
  • Geopolitical events will be key to watch in 2024, given multiple potential flashpoints around the world and a massive election cycle globally.

Emerging Markets Outlook

  • Inflation continues to retreat, providing room for emerging market central banks to extend the easing bias.
  • A weaker US dollar and lower interest rates should offer a more helpful backdrop, not only for emerging market economies but also for EM assets.

Global Capital Markets

  • Although some signs of complacency seem to have crept into equity markets, we continue to see a healthy outlook for global stock markets — some of which appear close to setting new all time highs.
  • The fundamental outlook for fixed income looks attractive as our expectations are for relatively subdued growth and lower short term interest rates. However, nearer term technical oriented factors suggest the rally in rates may have come too far and too fast.

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