Investment Institute
Macroeconomics

February Global Macro Monthly - Economic cross currents and central bank re-pricing

  • 23 February 2023 (10 min read)

Key points

  • Despite a number of cross-currents, the global growth outlook for 2023 looks firmer. This is driven by a post-COVID re-opening acceleration in China, a better-than-feared winter in Europe, and a stronger-for-longer US.
  • Inflation has fallen sharply, but mainly in headline terms. Core inflation – particularly services inflation – has remained more persistent and should remain elevated while labour markets are tight. Upside employment surprises in the US and Canada perpetuate this. Euro area inflation risks also look increasingly home grown.
  • Central banks will have to respond to this persistence. The ECB has signalled further tightening and is about to begin to unwind its asset purchases. The Fed looks likely to hike by more and we continue to expect a further hike from the Bank of England and see some risk from the Bank of Canada, despite its “conditional pause”.
  • Rate markets have recognised this risk and repriced accordingly. The expected Fed pivot is all but removed.

Related documents

Full Global Macro Monthly - February 2023
Download article (710.01 KB)
Investment Institute

Our experts and investment teams outline their key convictions.

Visit the Investment Institute

Related Articles

Macroeconomics

Rising Interest Rates Hurt – Who Knew ?

  • by Gilles Moëc
  • 13 March 2023 (3 min read)
Macroeconomics

Stockholm Syndrome

  • by Gilles Moëc
  • 06 March 2023 (5 min read)
Macroeconomics

Resilience of the West

  • by Gilles Moëc
  • 27 February 2023 (5 min read)

    Disclaimer

    This website is published by AXA Investment Managers Asia (Singapore) Ltd. (Registration No. 199001714W) for general circulation and informational purposes only. It does not constitute investment research or financial analysis relating to transactions in financial instruments, nor does it constitute on the part of AXA Investment Managers or its affiliated companies an offer to buy or sell any investments, products or services, and should not be considered as solicitation or investment, legal or tax advice, a recommendation for an investment strategy or a personalized recommendation to buy or sell securities. It has been prepared without taking into account the specific personal circumstances, investment objectives, financial situation or particular needs of any particular person and may be subject to change without notice. Please consult your financial or other professional advisers before making any investment decision.

    Due to its simplification, this publication is partial and opinions, estimates and forecasts herein are subjective and subject to change without notice. There is no guarantee forecasts made will come to pass. Data, figures, declarations, analysis, predictions and other information in this publication is provided based on our state of knowledge at the time of creation of this publication. Whilst every care is taken, no representation or warranty (including liability towards third parties), express or implied, is made as to the accuracy, reliability or completeness of the information contained herein. Reliance upon information in this material is at the sole discretion of the recipient. This material does not contain sufficient information to support an investment decision.

    All investment involves risk, including the loss of capital. The value of investments and the income from them can fluctuate and investors may not get back the amount originally invested.

    Some of the Services and/or products may not be available for offer to retail investors.

    This publication has not been reviewed by the Monetary Authority of Singapore.