Global debt 2023 regional outlook
Overview
We believe many of the headwinds that buffeted international risk assets in 2022 are shifting to tailwinds in 2023.
We expect stabilizing global interest rates over the next few months to provide a high level of nominal income and less volatility in 2023.
We believe varying regional growth and inflation dynamics could present significant opportunities to seek excess returns through active management.
With global rates nearing a peak, 2023’s investment environment is shaping up to be much more constructive than last year’s. We expect global rates to stabilize over the next few months, providing both a high level of nominal income and less overall volatility in 2023. With the US Federal Reserve’s (“Fed”) hiking cycle anticipated to wind down over the next several months and China rapidly reopening, US dollar strength seems to have reached an inflection point. While some uncertainties remain, many of the headwinds of 2022 are shifting to tailwinds for international risk assets. Inflation and growth dynamics vary greatly across regions and countries, which we expect to lead to greater dispersion in individual country returns going forward, presenting significant opportunities for active management.
The Global Debt Team takes a macro-oriented approach to global fixed income markets, investing across interest rates, currencies, and, for some strategies, credit, with an investment horizon of nine to 18 months. Below are the investment dynamics we are watching across major regions.
