06-Jun-23 Forecasts

Our forecasts

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

Macro

Still waiting for the recession

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

2023F

2024F

United States 1.0 ‌ 0.8
Eurozone 0.8 ‌ 0.9
United Kingdom 0.2 ‌ 1.1
Japan 1.0 ‌ 0.9
China 6.0   5.0
World 2.8 ‌ 3.0

Fiscal deficit (in % of GDP)

2023F

2024F

United States 4.8 ‌ 5.0
Eurozone 3.7 ‌ 3.3
United Kingdom 5.5 ‌ 4.5
Japan 6.5 ‌ 4.5
China 6.9 ‌ 6.4

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

2023F

2024F

United States[1] 4.3 ‌ 2.5
Eurozone 5.7 ‌ 2.5
United Kingdom 6.9 ‌ 2.5
Japan 2.9 ‌ 1.9
China 1.5   2.7

Unemployment Rate (annual average)

2023F

2024F

United States 3.8   4.7
Eurozone 6.7 ‌ 6.7
United Kingdom 4.0   4.1
Japan 2.6 ‌ 2.4
China 5.2 ‌ 5.0

Benchmark rates (in %)

Current[2]

Jun 2024F

United States 5.00-5.25 ‌ 4.75-5.0
Eurozone 3.25   4.00
United Kingdom 4.50   5.00
Japan -0.10   0.10
China 3.65   3.65

Commodities (in dollars)

Current[3]

Jun 2024F

Crude oil (Brent) 74.3   85
Gold 1,978   2,200
Copper (LME) 8,244   8,700

Equities

 OverhAIped?

Current[4]

Jun 2024F

Total Return (exp.)[5]

Expected earnings growth

P/E impact

Dividend yield

United States
(S&P 500)

4,221 ‌ 4,200 2.2% 1% -1% 1.8%

Europe
(Stoxx Europe 600)

455 ‌ 480 9.7% 2% 5% 3.4%

Eurozone
(Euro Stoxx 50)

4,258 ‌ 4,450 8.9% 0% 5% 3.4%

Germany
(DAX)[6]

15,854 ‌ 17,000 8.5% 1% 4% 3.3%

United Kingdom
(FTSE 100)

7,490 ‌ 7,700 7.5% -1% 4% 4.1%

Switzerland
(Swiss Market Index)

11,296 ‌ 11,500 5.8% 20% -18% 3.3%

Japan
(MSCI Japan Index)

1,321 ‌ 1,400 9.6% 3% 4% 2.6%

MSCI Emerging Markets Index
(USD)

962 ‌ 1,040 11.7% -1% 9% 3.2%

MSCI AC Asia ex Japan Index
(USD)

618 ‌ 680 12.9% 3% 7% 2.7%

F refers to DWS Investment GmbH forecasts as of 06/01/23

Fixed Income

No turning point for yields yet

Current[2]

Jun 2024F

United States
U.S. Treasuries (10-year) 3.60%   4.20%
U.S. high-yield municipal bonds[7]  231 bp   225 bp
U.S. investment-grade corporates[7] 128 bp   110 bp
U.S. high-yield corporates[7] 455 bp   450 bp
Securitized: mortgage-backed securities[8] 54 bp   120 bp 
Europe
German Bunds (10-year) 2.25%   2.80%
UK Gilts (10-year) 4.12%   3.95%
Euro investment-grade corporates[9] 168 bp   110 bp
Euro high-yield corporates[9] 494 bp   450 bp
Securitized: covered bonds[9] 92 bp   70 bp
Italy (10-year)[9] 184 bp   200 bp
Asia-Pacific
Japanese government bonds (10-year) 0.42%   0.75%
Asia credit 312 bp   280 bp
Global
Emerging-market sovereigns 481 bp   470 bp
Emerging-market credit 376bp   350 bp

Currencies

Current[10]

Jun2024F

EUR vs. USD 1.08   1.12
USD vs. JPY 139   130
EUR vs. GBP 0.86   0.86
GBP vs. USD 1.25   1.30
USD vs. CNY 7.10   6.90


F refers to our forecasts as of 06/01/23
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.

European bank bonds show surprising anxiety

Europe’s bank sector has proven resilient since the Credit Suisse rescue but AT1 bonds have still not fully recovered – making them all the more attractive, in our view.
Read more

More topics

Discover more

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

2. Source: Bloomberg Finance L.P. as of 06/01/23

3. Source: Bloomberg Finance L.P. as of 06/01/23

4. Sources: Bloomberg Finance L.P., FactSet Research Systems Inc. as of 06/01/23

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

10. Source: Bloomberg Finance L.P. as of 01/06/23

CIO View