25-Aug-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

Inflation and energy

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

2022F

2023F

United States 1.9   0.7
Eurozone 3.1   0.7
United Kingdom 3.5   -0.2
Japan 1.5   0.9
China 3.3   5.3
World 3.1   2.8

Fiscal deficit (in % of GDP)

2022F

2023F

United States 4.4   4.0
Eurozone 4.1   3.3
United Kingdom 4.0   4.0
Japan 7.5   5.0
China 11.0   7.5

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

2022F

2023F

United States[1] 4.8   3.3
Eurozone 8.2   5.0
United Kingdom 9.1   6.5
Japan 2.1   1.7
China 2.3   2.5

Unemployment Rate (annual average)

2022F

2023F

United States 3.8   4.3
Eurozone 7.0   6.8
United Kingdom 4.0   4.6
Japan 2.5   2.5
China 5.5   5.3

Benchmark rates (in %)

Current[2]

Sep 2023F

United States 2.25-2.50   3.50-3.75
Eurozone 0.00   2.00
United Kingdom 1.75   2.50
Japan 0.00   0.00
China 3.70   3.50

Commodities (in dollars)

Current[3]

Sep 2023F

Crude oil (Brent) 96.6   100
Gold 1,759   1,875
Copper (LME) 8,032   9,500

Equities

Relatively attractive

Current[4]

Sep 2023F

Total Return (exp.)[5]

Expected earnings growth

P/E impact

Dividend yield

United States
(S&P 500)

4,284 4,200 -0.1% 5% -6% 1.6%

Europe
(Stoxx Europe 600)

441 445 4.5% 3% -2% 3.6%

Eurozone
(Euro Stoxx 50)

3,777 3,750 3.2% 4% -4% 3.9%

Germany
(DAX)[6]

13,697 14,400 5.1% 4% -3% 3.7%

United Kingdom
(FTSE 100)

7,542 7,350 1.8% 1% -4% 4.4%

Switzerland
(Swiss Market Index)

11,168 11,150 2.9% 2% -2% 3.1%

Japan
(MSCI Japan Index)

1,224 1,250 4.7% 6% -3% 2.6%

MSCI Emerging Markets Index
(USD)

1,010 1,030 5.5% 2% 1% 3.3%

MSCI AC Asia ex Japan Index
(USD)

647 660 5.2% 3% -1% 3.0%

F refers to DWS Investment GmbH forecasts as of 8/18/22

Fixed Income

How far will central banks go?

Current[2]

Sep 2023F

United States
U.S. Treasuries (10-year) 2.88%   3.25%
U.S. high-yield municipal bonds[7]  231 bp   250 bp
U.S. investment-grade corporates 125 bp   150 bp
U.S. high-yield corporates 424 bp   550 bp
Securitized: mortgage-backed securities[8] 26 bp   40 bp 
Europe
German Bunds (10-year) 1.10%   1.75%
UK Gilts (10-year) 2.31%   2.25%
Euro investment-grade corporates[9] 182 bp   150 bp
Euro high-yield corporates[9] 540 bp   550 bp
Securitized: covered bonds[9] 91 bp   80 bp
Italy (10-year)[9] 222 bp   220 bp
Asia-Pacific
Japanese government bonds (10-year) 0.20%   0.20%
Asia credit 347 bp   340 bp
Global
Emerging-market sovereigns 487 bp   500 bp
Emerging-market credit 396 bp   390 bp

Currencies

Current[10]

Sep 2023F

EUR vs. USD 1.01   1.05
USD vs. JPY 136   130
EUR vs. GBP 0.85   0.88
GBP vs. USD 1.19   1.20
USD vs. CNY 6.79   6.95


F refers to our forecasts as of 8/18/22
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.

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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 8/18/22

3. Source: Bloomberg Finance L.P. as of 8/18/22

4. Sources: Bloomberg Finance L.P., FactSet Research Systems Inc. as of 8/18/22

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

10.  Source: Bloomberg Finance L.P. as of 8/18/22

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