A couple of notes from Deutsche Bank on their latest market outlook:
- Framework this year has emphasised on the importance of global risk
premium in driving a stronger dollar - The forecast profile for 2023 assumes the peak in risk premium
is behind us and will continue to improve next year - That includes a persistence of
US inflation and Fed risks through the 1H 2023 that does not allow the market to price an immediate and definitive
peak in Fed funds - This should lead to EUR/USD remaining choppy with the
exchange rate only sustainably moving back above 1.10 towards the end of the
year
Looking over to equities, the firm sees the current bear market being prolonged and continuing into Q1 next year at least. Here is their forecast for the current quarter through to next year:
Deutsche adds that in the case of a ‘soft landing’, they see the S&P 500 ending next year significantly higher at 5,000 instead.
This article was originally published by Forexlive.com. Read the original article here.