Nov 21, 2022 Forecasts

Our forecasts

In light of the very dynamic market environment these forecasts are subject to change at any time.

Macro

Mild recession ahead

GDP growth (in %, year-on-year)

2022F

2023F

United States 1.8 0.4
Eurozone 3.2 0.3
United Kingdom 4.3 -0.6
Japan 1.6 1.2
China 3.3   5.0
World 3.2 2.8

Fiscal deficit (in % of GDP)

2022F

2023F

United States 4.4 3.9
Eurozone 3.7 3.4
United Kingdom 6.8 5.5
Japan 8.5 4.0
China 8.9 7.2

Consumer price inflation (in %, year-on-year)

2022F

2023F

United States[1] 8.2 4.1
Eurozone 8.4 6.0
United Kingdom 9.0 7.8
Japan 2.3 1.6
China 2.0   2.3

Unemployment Rate (annual average)

2022F

2023F

United States 3.6   4.4
Eurozone 7.0 6.8
United Kingdom 3.8   4.2
Japan 2.6 2.5
China 5.2 5.0

Benchmark rates (in %)

Current[2]

Dec 2023F

United States 3.75-4.00   5.00-5.25
Eurozone 1.50   3.00
United Kingdom 3.00   4.00
Japan 0.00   0.00
China 3.65   3.65

Commodities (in dollars)

Current[3]

Dec 2023F

Crude oil (Brent) 89.8   100
Gold 1,760   1,850
Copper (LME) 8,110   8,500

Equities

There are alternatives

Current[4]

Dec 2023F

Total Return (exp.)[5]

Expected earnings growth

P/E impact

Dividend yield

United States
(S&P 500)

3,947 4,100 5.5% 1% 3% 1.7%

Europe
(Stoxx Europe 600)

428 445 6.4% -1% 4% 3.6%

Eurozone
(Euro Stoxx 50)

3,878 4,000 5.9% -2% 4% 3.9%

Germany
(DAX)[6]

14,266 15,000 4.1% 0% 1% 3.5%

United Kingdom
(FTSE 100)

7,347 7,650 8.0% -6% 9% 4.7%

Switzerland
(Swiss Market Index)

10,918 11,150 4.4% 10% -9% 3.2%

Japan
(MSCI Japan Index)

1,205 1,250 6.4% 2% 2% 2.6%

MSCI Emerging Markets Index
(USD)

942 990 8.2% 0% 5% 3.1%

MSCI AC Asia ex Japan Index
(USD)

603 625 6.4% 2% 2% 2.7%

F refers to DWS Investment GmbH forecasts as of 11/17/22

Fixed Income

 Income is back

Current[2]

Dec 2023F

United States
U.S. Treasuries (10-year) 3.77%   4.20%
U.S. high-yield municipal bonds[7]  231 bp   245 bp
U.S. investment-grade corporates 128 bp   130 bp
U.S. high-yield corporates 459 bp   500 bp
Securitized: mortgage-backed securities[8] 45 bp   40 bp 
Europe
German Bunds (10-year) 2.02%   2.40%
UK Gilts (10-year) 3.20%   3.30%
Euro investment-grade corporates[9] 188 bp   150 bp
Euro high-yield corporates[9] 532bp   550 bp
Securitized: covered bonds[9] 85 bp   90 bp
Italy (10-year)[9] 191 bp   240 bp
Asia-Pacific
Japanese government bonds (10-year) 0.25%   0.20%
Asia credit 374 bp   380 bp
Global
Emerging-market sovereigns 490 bp   500 bp
Emerging-market credit 422 bp   425 bp

Currencies

Current[2]

Dec 2023F

EUR vs. USD 1.04   1.05
USD vs. JPY 140   140
EUR vs. GBP 0.87   0.90
GBP vs. USD 1.19   1.15
USD vs. CNY 7.16   7.35


F refers to our forecasts as of 11/17/22
WTI = West Texas Intermediate
LME = London Metal Exchange
bp = basis points

Legend:

  • Macro data exchange rates and alternative investments: The arrows signal whether we expect to see an upward trend  , a sideways trend   or a downward trend  .
  • The signals' colors illustrate the return opportunities for long-only investors:  positive return potential for long-only investors.  limited return opportunity as well as downside risk.  negative return potential for long-only investors.

More topics

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1. core rate, personal consumption expenditure Dec/Dec in % (no average as for the other figures)

2. Source: Bloomberg Finance L.P. as of 11/17/22

3. Source: Bloomberg Finance L.P. as of 11/17/22

4. Sources: Bloomberg Finance L.P., FactSet Research Systems Inc. as of 11/17/22

5. Expected total return includes interest, dividends and capital gains where applicable

6. Total-return index (includes dividends)

7. Spread over U.S. Treasuries

8. Bloomberg Barclays MBS Forward Index

9. Spread over German Bunds

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