• The global business cycle is fraught with headwinds and challenges. In all likelihood, conditions will deteriorate before they improve, and this will offer the central banks the flexibility and justification to embark on a series of rate cuts needed to engineer soft landings.
  • The central banks of the ECB, BoE and the Fed will likely act in a very coordinated fashion, although it will be the Fed that will make the first move, with inflation in the US softening faster than anticipated and several economic data sets highlighting some deterioration in the world single largest economy.
  • But there is trouble brewing in other jusridictions and none of them appear to be immune to a cyclical downturn.


BASELINE VIEW: The global economy is set to experience a tough six months. But it will be these six months that galvanise the central banks into reducing interest rates, starting in Q2 2024, that will sow the seeds of the next up turn