Inflation trends, central banks and geopolitics to drive markets
Inflation trends, central banks and geopolitics to drive markets
Monday 01 July 2024
Global Investment Views, Equity, Fixed income
Inflation trends, central banks and geopolitics to drive markets
July 2024 | In addition to central banks' policies and inflation trends, we believe domestic politics and their impact on international relations will be important determinants of financial markets and economic direction. Our economic outlook is relatively robust, but valuations are tight in some areas of risk assets, allowing us to stay slightly positive on equities overall. However, we reduced our stance slightly in developed market equities and believe investors should consider building protection in some areas here. In bonds, we are constructive on US duration and core Europe, while we maintain our cautious stance on Japan. In corporate credit, EU investment grade is our favorite area.
01 | We upgraded our global growth forecasts slightly for this year, but in the US, labor markets indicate that consumption will gradually slow, which is a large part of the economy.
02 | Recent moderation in US core services inflation is encouraging, but we believe some stickiness will persist. We raised our headline Consumer Price Index forecasts to 3.3% and 2.5% for 2024 and 2025.
03 | Themes such as rising protectionism and political uncertainty are playing out. A potential Trump presidency could result in a deterioration of US ties with EU, and continuation of the rivalry with China.
Unless otherwise stated, all information contained in this document is from Amundi Asset Management as of July 1, 2024 . Diversification does not guarantee a profit or protect against a loss. The views expressed regarding market and economic trends are those of the author and not necessarily Amundi Asset Management and are subject to change at any time based on market and other conditions, and there can be no assurance that countries, markets or sectors will perform as expected. These views should not be relied upon as investment advice, a security recommendation, or as an indication of trading for any Amundi product or service. This material does not constitute an offer or solicitation to buy or sell any security, fund units or services. Investment involves risks, including market, political, liquidity and currency risks. Past performance is not indicative of future results. Amundi US is the US business of Amundi Asset Management.
