Europe

We explore the eight major themes that will define economic and market trends for Europe next year.

In this <i>Strategy Outlook</i>, we present the major investment themes and views we see playing out next year and beyond.

The pandemic gave older Americans and Brits a massive carrot and stick to retire early. The carrot being a surge in wealth, the stick being a risk to health. In other major economies, the carrots and sticks were smaller or non-existent. Hence, the shortage of older workers, and the resulting wage inflation, is a specific US and UK problem. We go through the important economic and investment implications for 2023.

European inflation will decline through 2023, which will greatly help households and consumption. But can European inflation remain low after that?

MacroQuant is overweight bonds, underweight equities, and neutral on cash. Within the equity universe, the model is underweight the US and overweight Japan, the UK, and Australia.