Whilst Christmas and the holiday season is fast approaching, there is no shortage of key economic events and data releases on the global economic calendar.
This week we have the Federal Reserve (FED), European Central Bank (ECB) and the Bank of England (BoE) all meeting and deciding on policy rate settings for the final time in 2022.
The markets expectations are that each central bank will shift to a less aggressive monetary tightening regime, raising interest rates 50bps versus prior increases of 75bps.
As was confirmed from the November 2022 U.S. CPI print, inflationary pressures are expected to continue declining and potentially leading to further slowing of rate hikes when central banks meet once again in 2023.
The key questions for inflation in 2023 are, how fast will it fall? And where will it settle? The answer to these questions will be crucial to future global monetary policy responses.
As we near 2023, it is of Clime’s view that investors should shift their focus away from central banks and inflation and towards the outlook for economic growth and how this will affect assets exposed to global economies. We expect that Australia’s commodity-driven economy will avoid a recession, as it benefits from the reopening of China and the globes continued commitment towards achieving its ambitious decarbonisation goals.
These structural shifts underpin our view that the Australian equity market remains attractive versus its global peers and is supported by strong relative forecasted corporate dividend and earnings growth.
Source: Bloomberg
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