Market Compass November 2024

Highlights:

• The global growth environment is stabilizing as the US economy continues to show resilience while momentum in China and the euro area is bottoming.
• Central banks are easing policy as inflation normalises and the risks subtly shift from inflation to the activity side. Overall, this Goldilocks environment remains mildly conducive to risk exposure.
• President Trump’s agenda of tariffs, tax cuts and immigration curbs would prove inflationary in the US, initially sending US yields, the USD and selected US equity baskets higher, especially as it is backed by a ‘red wave’.
• We keep a prudent allocation stance, mostly favouring carry from credit and EM over lower-yielding euro govies for now. But given the overall conducive macro backdrop (moderate growth, easing inflation) we lean towards scaling up risk exposure with US election uncertainties now largely out of the way.

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