• A large section of the world (around 42% of global GDP) will elect its political leaders this year, with the US in focus.
  • Increasingly, internal politics in emerging powers such as China, India, and Latin America will shape global geopolitics.
  • This realignment presents opportunities arising out domestic consumption, supply chain reallocation, near shoring etc.

Actionable Ideas

  • US bonds
    Government bonds offer safety in times of slowing economic growth and high geopolitical risks in the form of tensions in the Middle East/Red Sea, Russia/Ukraine war. But the need to be active is high.
     
  • Emerging Market (EM) bonds
    EM bonds for example in Asia and Latin America provide high yields to investors looking to boost their income. Importantly, EM show divergences in their growth path and hence selection is important.

Key Dates

23 Jan

BoJ Monetary Policy, EZ
Consumer Confidence

 

25 Jan

US & South Korea GDP,
ECB Monetary Policy

 

26 Jan

US PCE, Mexico Trade
Balance

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