Skip to main content

Global Macro Outlook Q3 2023: The long and winding road

Macroeconomic Strategy Team

6 July 2023

Key takeaways

  • Recession postponed, not canceled—Despite the aggressive policy tightening we’ve seen so far, economic activity in developed economies proved to be more resilient than expected amid a strong rebound in the services sector.
  • Inflation is still too sticky at uncomfortable levels—While headline inflation is easing, core inflation remains stubbornly high, and it isn’t just due to services inflation: Goods inflation is inflecting higher after a period of decline.
  • We believe central bank policy easing will be more gradual than consensus expectations—From the Bank of Canada to the Reserve Bank of Australia to Bank Negara Malaysia to the U.S. Federal Reserve, central banks around the world are proving to be more hawkish than expected.
  • Shifting geopolitics and the need for a new market playbook—There are signs that we’re entering a new global regime, requiring a rethink of how risk assets respond to changes in the macro backdrop. To be forewarned is to be forearmed. We continue to believe:

1. The market is premature in its pricing of dovish pivots from central banks, both in terms of timing and magnitude.

2. There’s a risk that even if the Fed pauses in the coming months, the next move could be more tightening, not easing.

3. Markets need to reassess the central bank put for asset prices.


Download the full PDF



  • Asian High Yield: Building resiliency amid volatility

    Although emerging from a difficult period, Asian-high-yield is positioned to weather the current market volatility due to regional economic strength and unique asset class characteristics.

    Read more
  • Global Healthcare: Enhanced innovation in a post-COVID environment

    We discuss the attractiveness of allocating to the healthcare sector in the current economic environment and outlines why it warrants a long-term allocation.

    Read more
  • What’s next for China’s property sector?

    The road ahead is likely to be bumpy but select opportunities still exist in the US-dollar high-yield bond space. Robust credit selection and valuation assessment have become even more important considerations in the current market environment.

    Read more
See all
  • Your retirement withdrawal strategy—four tips for managing inflation

    When it is time to enjoy what you’ve always dreamed of doing, the retirement planning doesn’t end there. It’s important to regularly review your withdrawal strategy and make adjustments as needed to keep changing economic conditions from throwing you off track. Consider the four tips to help keep inflation from depleting your retirement savings sooner than you expected.

    Read more
  • Strike a balance in life, and most importantly, in your portfolio!

    A balanced asset allocation usually provides investors with a smoother investment experience and perhaps helps protect them from selling equities after they have already fallen in price. If you believe that we are likely to enter a period of further economic weakness, we’re likely to be reminded of the importance of bonds in a portfolio.

    Read more
  • 2024 Outlook Series: Global Healthcare Equities

    2023 was a tumultuous year for equity markets and the healthcare sector. For 2024, we maintain a sense of considerable optimism for the performance of healthcare equities and the underlying key subsector themes.

    Read more
See all