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Global Private Banking Investment Outlook Report Currencies and Commodities USD strength has been a key As a result, we recently downgraded Bullish dynamic of financial markets since USD to neutral; upgraded EUR and the start of 2021, but the outlook GBP to a neutral view; and JPY JPY, SGD, BRL is changing. The dollar benefited and SGD to a bullish view. In the from the leadership of the Fed in commodities space, we remain Neutral setting the pace of monetary policy neutral on Gold, Silver and Oil as USD, EUR, GBP, CHF, AUD, NZD, CAD, tightening and an attractive rate we see muted momentum. EM FX (including RMB), Gold, Silver pickup compared to many other G10 USD strength has been a very consistent and Oil currencies. But as we get closer story over the past two years and to peak rate levels, we think those investors who have stuck with it have Bearish rate differentials are unlikely to benefited from strong currency gains, widen further, and the gap may even with the USD index trading at 20 year KRW narrow with some countries. As a highs in early November. While there result, the main tailwind for USD is were three main tailwinds (widening The October US CPI figure, which finally fading fast. USD will still get some interest rate differentials, weakening showed a decline in core inflation, support however from weakening global economic growth, weak risk is giving markets hope that we are global economic growth, relative appetite), at least one of them (rate approaching peak rates, and as a economic resilience in the US and differentials) is quickly falling away. result, there is reduced upside risk to mixed-to-weak risk appetite. 32

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