Global Economics & Market Strategy

3Q24 Outlook: Green Shoots-Turned-Trees Are Seeing Some Maturing

26 June 2024
 

Barnabas Gan Acting Group Chief Economist & Head, Market Research

• The five themes global investors will focus on in 3Q24 are (1) the continued economic recovery momentum in US and China, albeit (2) with pockets of risk in ASEAN following idiosyncratic factors surrounding specific economies. We also maintain our view for (3) the persistence of global inflation pressures, (4) high-for-longer global rates and (5) USD strength to be on the path of least resistance. 
   
• We are arguably less positive against how we started in 2Q24. We are seeing early signs of plateauing trade conditions in ASEAN, while US labour recovery conditions may be normalising on the back of the sustained pickup since the pandemic. Our RHB Global Risk Sentiment Index suggests risk appetite to stay supported into early July, but softer-than-expected global data may well be on the cards.
   
• Fixed income: For 3Q24, continue to pay in UST10YR swaps and sell UST10YR bonds on rallies – we forecast UST10YR yields to rise to its 4.5% handle. In the US and Southeast Asia, we prefer credit relative to local currency government bonds. Foreign exchange: we forecast DXY to rally further to 105 - 110 in 3Q24, before trending to 100 in 4Q24. 
   

Please note that the reports published by the Economics and Market Strategy or any division within RHB Bank Berhad and/or its subsidiaries, related companies and affiliates, as applicable (“RHB”) are compiled from data considered to be reliable at the time of writing, but RHB does not make any representation or warranty, express or implied, as to its suitability, accuracy, completeness or correctness. Neither the reports, nor any opinions expressed therein, should be construed as an offer to sell or a solicitation of an offer to acquire any securities or financial instruments mentioned therein. RHB (including its officers, directors, associates, connected parties, and/or employees) accepts no liability whatsoever for any direct or consequential loss arising from the use of the reports or any contents therein. The reports may not be reproduced, distributed or published for any purpose without prior consent of RHB and RHB (including its officers, directors, associates, connected parties, and/or employees) accepts no liability whatsoever for the actions of third parties in this respect. By accessing the reports, you agree to the disclaimer herein and the section on ‘’Disclaimer Economics and Market Strategy’’ and/or any other disclaimer in the reports.