Investment Institute
Monthly Market Update

May Global Macro Monthly - Summertime ... and the (debt) ceiling is nearing

  • 24 May 2023 (7 min read)

Key points

  • The banking system is still a cause for concern, although evidence to date suggests it has not led to a material worsening in credit conditions over recent months.
  • The US debt ceiling is coming into focus. We expect an eventual resolution, which should limit the impact to US assets. But global markets watch for a political misstep.
  • Emerging market concerns rose in the wake of a poll surprise in Turkey’s Presidential Elections and as Argentina attempts to avert currency weakness.
  • These developments come against a fragile economic background. The US appears close to a mild recession and while Eurozone growth has surprised in recent quarters, we expect stagnation in the second half of this year.
  • Central banks face difficult judgements. We believe that the Federal Reserve, Bank of England and Bank of Canada have all peaked. We see the European Central Bank tightening policy until 3.75% in July.
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    Disclaimer

    This document is for informational purposes only and does not constitute investment research or financial analysis relating to transactions in financial instruments as per MIF Directive (2014/65/EU), 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.

    Due to its simplification, this document 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 document is provided based on our state of knowledge at the time of creation of this document. 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.

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