Macroeconomic overview. October 2023

Movchan's Group

Nov 27, 2023

The global economy is in a state of unstable equilibrium. On one hand, inflation in the US remains moderately high, but the downward trend is quite transparent. It is even more evident in Europe. Other macro indicators have stabilized, albeit at a rather modest level — growth in the US, near-recession dynamics in Europe, and below-trend growth in China. At the same time, for the first time since the Covid-19 pandemic, there are talks about the possibility of a rate cut in one of the largest developed economies in the world, namely in the eurozone.

The escalation of the regional conflict in the Middle East initially scared investors, but as the situation developed, it did not particularly affect the markets (at least for now).

Topics we have focused on:

• Inflation is ceasing to be an important macro theme for the US, and the market no longer believes in the prospect of further rate hikes.
• The GDP decline in the third quarter and the drop in inflation in the eurozone have sparked discussions about a possible ECB rate cut.
• Geopolitical tensions in the Middle East are currently limited and do not have a significant impact on the key indicators of the global economy.

The full version of our report can be downloaded via the link.