Overall, it was a positive three months for risk markets, notwithstanding ongoing challenges faced by major global economies.
Western developed central banks have aggressively tightened monetary policy trying to reduce demand and bring down inflation. The consequence being a meaningful slowdown in global growth and several corporate failures, like US regional banks. However, consumer demand and wage growth remain resilient continuing the interest rate debate and concerns of a US or global recession.
At this stage we feel like a shallow slowdown can be achieved with further weakness in Q4, before moving in 2024 into more positive growth territory. Statistically the US will hold for around six months before the first rate cut. As is normal, we expect the UK and Eurozone will follow the US, with a lag of around two to six months.