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Vantage Point: Pivotal year

Welcome to another edition of Vantage Point and our look ahead to 2023.

Featured Insights

Macro Update on Market Volatility

Silicon Valley Bank collapse, explained.

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Learning from earnings

Q4 earnings faced a low bar and largely underwhelmed, despite modestly beating expectations. The biggest takeaway is the notable downward revision to the outlook…

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January inflation data hawkish for the Federal Reserve

January US personal spending and PCE surprised significantly to the upside, sending yields higher by up to 10 basis points, the Treasury curve flatter, and equities lower.

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Does the February USD rebound have legs?

Declining US inflation and positive growth surprises out of the euro area and China contributed to US dollar weakness at the start of 2023. However, the USD has since reversed its course.

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Value's run is not done

Investors should resist assuming that value’s recent performance was a one-off fluke and that the 2020s will be a repeat performance of growth’s domination over value.

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Does the fall in M2 have implications for prices?

Over a longer period, the relationship between M2, its velocity and inflation has been unstable.

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Is the Fed’s war against inflation over?

In the US, inflationary optics will have finally turned positive for the Fed in 1H2023, aided by favorable base effects and goods disinflation. However, the labor market remains tight, and inflationary trends in the services sector tend to correlate with wage inflation.

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Japan Macro Update: Yield Curve Control Recalibration Necessary for Policy Sustainability

The Bank of Japan’s experiment with Yield Curve Control and asset purchases is set to wind down. The current framework is getting exorbitant, worsening adverse side effects...

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China in 2023: Anatomy of a Messy

After an annus horribilis, we expect China’s economy to experience a messy but much needed growth recovery by mid-2023 on the country’s pivot from its zero-Covid policies.

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The pain in the equity market is likely not over

The market expects the inflation problem to be sorted out by a shallow recession and loosening monetary policy in 2023. We think otherwise…

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Monthly Market Roundup


March 2023

February flip

  • After a strong start to 2023, markets reversed in February across stocks and bonds.
  • US and European inflation, namely services inflation, remained elevated and is proving to be a tougher job than expected for central banks.
  • China's re-opening impulse was dampened by geopolitical issues (the balloon incident) and profit-taking.
  • The US 10-Year Treasury yield breached the 4% mark, and yield curve inversion was at its deepest since the 1980s (nearly -1%).
  • Global equities fell 2-3% for the month, led by a pull-back in China. The S&P 500 fell by 2.4% given broad sector declines, though the Nasdaq and Russell 2000 indices lost less than 2%.
  • European equities fared better than its global counterparts amidst improving business confidence and consumer sentiment, as well as lower energy prices.
  • Credit held up reasonably well, commodities continued their steady slide, and the USD re-couped its past few months of losses.
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Points of View

What’s the Fed to do?

Recent stresses in the global financial systems, albeit generally confined to its weakest links, carry an increased probability of a credit pullback later this year. This would result in lower real activity as well.

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US inflation momentum slows in October

US October Consumer Price Index (CPI) was weaker than expected in both headline and core. The deceleration in core inflation should be particularly comforting for the Fed.

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Japan: Yen in a Free Fall, but a Policy Pivot is Nearing

Describes how global policy divergence and other macro-drivers of large-scale Yen depreciation are still intact, but these are now starting to discernably raise inflation pressure in Japan.

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Elevated Sino-US Tension over Taiwan to Accelerate Economic De-Coupling

The Taiwan related tension may not go away quickly with the upcoming quinquennial transition in China and US mid-term elections. We cover more in this note.

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Food Price Shocks: Macro and Investment Implications

This note details our latest analysis of prolonged food price shocks and their impact on macro and investments.

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Bear Markets: More Pain, Then Gain

The history of bear markets makes for gloomy reading. However, this brief note focuses on what we might expect once the -20% threshold has been crossed. How has the market (S&P 500) performed after entering a bear market?

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Don’t Blame China for Inflation Damage in the U.S.

The state of global supply chains are widely seen as heavily influenced by developments in China. While it is true that China accounts for a large (nearly 30%) share of global manufacturing and shipping, we believe that it is far from obvious that it “causes” U.S. inflation. We cover some highlights and metrics in this note.

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A Deep Dive into QT

In this third note of three, we review the arguments behind these opposing views in the previous two, in the hope to provide some clarity for investors as they attempt to navigate markets in the challenging times ahead.

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Could QT lead to a steeper yield curve?

In the first note in a series of three on QT we argued that QT will most likely contribute to a flattening of the yield curve. Instead, many financial market participants tend to associate Quantitative Tightening (QT) with a steepening of the yield curve.

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The Impact of QT on Financial Markets

We have written extensively on our expectations for future rate hikes and the peak in US rates. In this paper, the first in a series of three on Quantitative Tightening (QT), we summarize our thinking on QT and its implications for markets.

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Yield Curve Inversion... This Time Is Not Different

We believe the possibility of a recession in the US over the coming two to three years is increasing. As such, we take a strong signal from the recent (albeit brief) yield curve inversion and in this note, address how our analysis led to this conclusion.

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Global Economics and Investment Analysis Group

Meet the minds behind the research.

Shamik Dhar

Chief Economist


Aninda Mitra

Head of Asia Macro & Investment Strategy


Sebastian Vismara

Senior Financial Economist


Jake Jolly, CFA

Head of Investment Analysis


Sonia Meskin

Head of U.S. Macro


Zoë Mader

Lead Analyst, Emerging Leaders Program