FX Quarterly: What Will Steer Rates in 2023?

February 03, 2023
  • Investor Services
In 2023’s first FX quarterly, strategists examine the Fed’s pivot and China’s reopening. Here is a synopsis of what is included in this quarter’s outlook.
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What Does the Fed Pivot Spell for Major Markets?

Expectations for Fed policy continue to drive global bond, equity, and FX markets. that is why we think it is crucial to get the call right, as everything else should fall into place. Despite the recent shift in market expectations, our Fed call remains unchanged: we are not yet nearing the end of the tightening cycle.

China’s Reopening and What it Means for Emerging Markets

China’s abrupt abandonment of its Covid Zero policy in December 2022 has fed into optimism that the world’s second largest economy will get back on track after last year’s subpar growth. The MSCI EM has rallied nearly 25% since the October trough, when it traded at the lowest since April 2020. However, it has only recouped about 30% of its losses from the February 2021 peak. Part of this rally is due to the Fed pivot story, while the other part is due to China reopening.

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FX Quarterly Q3 2022

August 31, 2022
Our Currency Strategists set out what the geopolitical and macro-economic landscape means for major and emerging markets in the third quarter
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