Looking at the macro data from the last two months in the U.S., there’s no sign of a significant short-term recession risk. This is great news, though it means the Fed will likely reduce interest rates less than the market has expected, especially in 2025.

In the Eurozone, activity remains sluggish, and combined with declining inflation, the ECB is expected to lower rates again this October. Despite slower-than-expected European growth this year, we believe private consumption remains strong, and consumer confidence is improving, which could lead to a recovery soon.

On a positive note, China is ramping up stimulus efforts, which should help meet its growth targets. Meanwhile, the UK economy shows resilience, emerging Asia (excluding China) remains strong, and Japan’s outlook is favorable with wages growing faster than inflation, supporting consumption.

Given all this, we maintain a cautiously constructive view on risk assets, expect more upward pressure on long-term interest rates, and have become more favorable toward the U.S. dollar since mid-September, using it as a hedge against risks from the Middle East conflict and U.S. elections.

Read the Macro Update for October 2024

Alantra

Alantra is an international financial services firm with over 600 professionals representing 35 nationalities across 24 offices. Founded in 2001, Alantra provides alternative asset management, private capital and financial advisory services to companies, families and investors operating in the mid-market segment.

Information provided is general information and is for educational purposes only, and does not include, or constitute as, financial product advice.