September 2024 - Monthly House Views

Central banks to step up the pace

Global stock markets had a volatile summer, beginning with an equity market sell-off late July driven partly by US recession fears. Later on, more encouraging data allowed the markets to bounce back. While downside risks exist, the US is likely to experience only a gradual slowdown, still buoyed by solid corporate and household balance sheets. In Europe, growth should remain modest but positive. Against this backdrop, the major central banks are likely to step up the pace of monetary policy loosening, as inflation is getting closer to the 2% target. What does this volatile environment mean for investors and and how does it impact our asset allocation?