Summary

Alf Peccatiello believes that 2024 is likely to start as a replica of Q2-2019. That's the period immediately after Powell's verbal pivot, with weak but not recessionary labour market dynamics, inflation already trending at 2% and the Fed preparing for the first cut. Macro Compass’ analysis shows the best risk/reward ideas lie in Gold, credit and other ''smart'' carry strategies, and selected equity markets (e.g. Brazil). Additionally, idiosyncratic ideas will resurface again as all Central Banks tightened aggressively but not all economies are equally equipped to handle the heat. Their framework identifies private sector vulnerabilities in G10 economies and it suggests markets are overestimating the resilience of the UK, New Zealand, and Canada.

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