18-May-22 Forecasts

Our forecasts

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

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Macro

Growth deceleration

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

2022F

2023F

United States 2.9   2.2
Eurozone 2.8   2.2
United Kingdom 3.9   1.0
Japan 2.0   1.8
China 4.5   4.8
World 3.3   3.3

Fiscal deficit (in % of GDP)

2022F

2023F

United States 5.3   4.5
Eurozone 4.7   3.3
United Kingdom 4.1   3.2
Japan 6.0   3.5
China 7.7   7.1

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

2022F

2023F

United States[1] 4.7   2.9
Eurozone 8.0   3.3
United Kingdom 7.8   4.5
Japan 1.9   1.7
China 2.3   2.3

Unemployment Rate (annual average)

2022F

2023F

United States 3.5   3.8
Eurozone 7.0   6.8
United Kingdom 3.8   3.8
Japan 2.4   2.3
China 5.2   5.0

Benchmark rates (in %)

Current[2]

Jun 2023F

United States 0.75-1.00   3.25-3.50
Eurozone -0.50   0.75
United Kingdom 1.00   2.00
Japan 0.00   0.00
China 3.70   3.60

Commodities (in dollars)

Current[3]

Jun 2023F

Crude oil (WTI 12M forward) 107.5   110
Gold 1,822   2,100
Copper (LME) 9,090   11,000

Equities

Goodbye TINA

Current[4]

Jun 2023F

Total Return (exp.)[5]

Expected earnings growth

P/E impact

Dividend yield

United States
(S&P 500)

3,930 4,400 13.7% 5% 7% 1.7%

Europe
(Stoxx Europe 600)

424 460 11.9% 6% 2% 3.5%

Eurozone
(Euro Stoxx 50)

3,613 3,900 11.7% 4% 4% 3.7%

Germany
(DAX)[6]

13,740 14,600 6.3% 2% 1% 3.4%

United Kingdom
(FTSE 100)

7,233 7,500 7.9% 6% -2% 4.2%

Switzerland
(Swiss Market Index)

11,506 12,000 7.3% 1% 3% 3.0%

Japan
(MSCI Japan Index)

1,124 1,200 9.4% 8% -1% 2.7%

MSCI Emerging Markets Index
(USD)

988 1,110 15.8% 2% 11% 3.5%

MSCI AC Asia ex Japan Index
(USD)

629 700 14.3% 5% 6% 3.1%

F refers to DWS Investment GmbH forecasts as of 5/12/22

Fixed Income

Fighting inflation

Current[2]

Jun 2023F

United States
U.S. Treasuries (10-year) 2.85%   3.25%
U.S. high-yield municipal bonds[7]  190 bp   225 bp
U.S. investment-grade corporates 131 bp   135 bp
U.S. high-yield corporates 458 bp   460 bp
Securitized: mortgage-backed securities[8] 32 bp   48 bp 
Europe
German Bunds (10-year) 0.84%   1.00%
UK Gilts (10-year) 1.66%   2.00%
Euro investment-grade corporates[9] 168 bp   135 bp
Euro high-yield corporates[9] 523 bp   450 bp
Securitized: covered bonds[9] 80 bp   70 bp
Italy (10-year)[9] 187 bp   180 bp
Asia-Pacific
Japanese government bonds (10-year) 0.25%   0.20%
Asia credit 317 bp   290 bp
Global
Emerging-market sovereigns 475 bp   460 bp
Emerging-market credit 363 bp   340 bp

Currencies

Current[3]

Jun 2023F

EUR vs. USD 1.04   1.10
USD vs. JPY 128   125
EUR vs. GBP 0.85   0.92
GBP vs. USD 1.22   1.20
USD vs. CNY 6.79   6.75


F refers to DWS Investment GmbH forecasts as of 5/12/22
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.

Too early for all-clear

Despite high market losses since the beginning of the year, new lows cannot be ruled out. But our core scenario is optimistic on the 12-month horizon.
Read more

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 5/12/22

3. Source: Bloomberg Finance L.P. as of 5/12/22

4. Sources: Bloomberg Finance L.P., FactSet Research Systems Inc. as of 5/12/22

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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