Mar 10, 2023 Forecasts

Our forecasts

In light of the very dynamic market environment these forecasts are subject to change at any time.

Macro

Mild down- and mild upturn

GDP growth (in %, year-on-year)

2023F

2024F

United States 0.7 ‌ 1.1
Eurozone 0.8 ‌ 1.1
United Kingdom -0.5 ‌ 1.1
Japan 1.0 ‌ 0.8
China 5.5   5.3
World 2.7 ‌ 3.1

Fiscal deficit (in % of GDP)

2023F

2024F

United States 4.3 ‌ 4.5
Eurozone 3.6 ‌ 2.9
United Kingdom 6.0 ‌ 4.0
Japan 6.0 ‌ 3.5
China 7.2 ‌ 6.5

Consumer price inflation (in %, year-on-year)

2023F

2024F

United States[1] 3.9 ‌ 2.4
Eurozone 5.7 ‌ 2.7
United Kingdom 6.4 ‌ 2.5
Japan 2.5 ‌ 1.7
China 2.5   2.5

Unemployment Rate (annual average)

2023F

2024F

United States 4.2   4.7
Eurozone 6.7 ‌ 6.7
United Kingdom 4.2   4.1
Japan 2.5 ‌ 2.4
China 5.2 ‌ 5.0

Benchmark rates (in %)

Current[2]

Mar 2024F

United States 4.50-4.75   5.25-5.50
Eurozone 2.50   4.00
United Kingdom 4.00   4.25
Japan 0.00   0.10
China 3.65   3.65

Commodities (in dollars)

Current[3]

Mar 2024F

Crude oil (Brent) 86.2   100
Gold 1,847   1,940
Copper (LME) 8,921   9,250

Equities

Little more than dividends

Current[4]

Mar 2024F

Total Return (exp.)[5]

Expected earnings growth

P/E impact

Dividend yield

United States
(S&P 500)

4,048 ‌ 4,100 2.6% 1% -1% 1.8%

Europe
(Stoxx Europe 600)

464 ‌ 480 6.9% 2% 2% 3.4%

Eurozone
(Euro Stoxx 50)

4,314 ‌ 4,350 4.2% 0% 1% 3.4%

Germany
(DAX)[6]

15,654 ‌ 16,300 4.1% 1% -1% 3.3%

United Kingdom
(FTSE 100)

7,930 ‌ 8,100 6.2% -1% 3% 4.1%

Switzerland
(Swiss Market Index)

11,147 ‌ 11,100 2.8% 20% -21% 3.3%

Japan
(MSCI Japan Index)

1,241 ‌ 1,250 4.3% 3% -1% 2.6%

MSCI Emerging Markets Index
(USD)

994 ‌ 1,020 6.4% -1% 4% 3.2%

MSCI AC Asia ex Japan Index
(USD)

644 ‌ 670 7.2% 3% 1% 2.7%

F refers to DWS Investment GmbH forecasts as of 11/17/22

Fixed Income

Yields might increase before decreasing

Current[2]

Mar 2024F

United States
U.S. Treasuries (10-year) 3.96%   4.30%
U.S. high-yield municipal bonds[7]  231 bp   245 bp
U.S. investment-grade corporates[7] 112 bp   110 bp
U.S. high-yield corporates[7] 389 bp   450 bp
Securitized: mortgage-backed securities[8] 40 bp   35 bp 
Europe
German Bunds (10-year) 2.75%   2.90%
UK Gilts (10-year) 3.87%   3.60%
Euro investment-grade corporates[9] 144 bp   110 bp
Euro high-yield corporates[9] 414 bp   420 bp
Securitized: covered bonds[9] 70 bp   70 bp
Italy (10-year)[9] 183 bp   220 bp
Asia-Pacific
Japanese government bonds (10-year) 0.51%   0.75%
Asia credit 267 bp   250 bp
Global
Emerging-market sovereigns 442 bp   470 bp
Emerging-market credit 322 bp   350 bp

Currencies

Current[2]

Mar 2024F

EUR vs. USD 1.07   1.10
USD vs. JPY 136   125
EUR vs. GBP 0.89   0.89
GBP vs. USD 1.20   1.25
USD vs. CNY 6.93   6.95


F refers to our forecasts as of 03/06/23
WTI = West Texas Intermediate
LME = London Metal Exchange
bp = basis points

Legend:

  • Macro data exchange rates and alternative investments: The arrows signal whether we expect to see an upward trend  , a sideways trend   or a downward trend  .
  • The signals' colors illustrate the return opportunities for long-only investors:  positive return potential for long-only investors.  limited return opportunity as well as downside risk.  negative return potential for long-only investors.

Tales of the Unexpected

Inflation looks set to remain quite sticky, with more interest rate hikes to come. This makes for a rather challenging environment for many risky assets.
Read more

More topics

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1. core rate, personal consumption expenditure Dec/Dec in % (no average as for the other figures)

2. Source: Bloomberg Finance L.P. as of 03/06/23

3. Source: Bloomberg Finance L.P. as of 03/06/23

4. Sources: Bloomberg Finance L.P., FactSet Research Systems Inc. as of 03/06/23

5. Expected total return includes interest, dividends and capital gains where applicable

6. Total-return index (includes dividends)

7. Spread over U.S. Treasuries

8. Bloomberg Barclays MBS Forward Index

9. Spread over German Bunds

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