Zusammenfassung
The GIV elaborates on the latest views, convictions and outlook of our Global CIOs, different Investment Platforms and the Amundi Institute.
Inflation trends, central banks and geopolitics to drive markets
Recent weeks have signalled that, in addition to central banks’ policies and inflation trends, domestic politics and their impact on international relations are important determinants of financial markets and economic direction. In terms of markets, expectations of Fed rate cuts have been changing due to slowing US inflation and conflicting labour data showing strength in the economy.
Three hot questions
- What’s your view on the US economy this year?
- How will central banks’ policies affect the USD?
- How are corporate earnings turning out this season?
Regional divergences call for rotation
The economic backdrop in countries such as the US has proved to be better than expected so far, which has helped to lift market sentiment. For the second half of the year, we expect a deceleration in the US economy and a small risk of an inflation reacceleration.
Decelerating inflation paints a positive picture for bonds
Soft data in the form of consumer surveys are pointing to weakness ahead in the US, along with cooling inflation and labour markets. The last two are the main factors the Fed, currently in pause, will need to consider in terms of judging when to start cutting rates. Across the Atlantic, the story is similar for the ECB and the Bank of England, which are keenly monitoring progress on wage growth and price pressures. But the difference (with the Fed) lies in the degree of expected monetary easing.
Use earnings resilience to play the shift in equities
Markets are still characterised by anomalies, even though we are observing some underlying shifts in favour of segments that have lagged behind in this year’s rally, such as value and small caps. In order to assess whether these shifts will continue, we assess the overall economic backdrop, the earnings strength of companies and corporate commentaries especially related to inflation, costs, artificial intelligence (AI) etc.
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