Volatile Markets Ahead in 2024, But Opportunities Seen in High Quality Bonds
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Government bond yields expected to remain volatile in 2024 as central banks continue shrinking balance sheets. Best opportunities likely in Europe due to diverging country dynamics.
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U.S. dollar strength expected to continue into early 2024 on growth outperformance, rate differentials, and safe haven appeal, before weakening later as Fed cuts rates.
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Supportive backdrop for corporate credit in 2024 on decent fundamentals, technicals, valuations; favor shorter-dated investment grade.
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U.S. housing activity and new home sales expected to pick up in 2024 as rates fall, boosting mortgage issuance modestly.
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Global economy faces low growth and risks from tight monetary policy and geopolitics, but markets see opportunities in high quality fixed income.