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Our answers to four recent client questions




What are the risks related to the various elections to be held in 2024?

•This year is a packed year for elections throughout the globe. The most significant one for the financial markets is the American election.

•In the US, there is a relatively high probability that control of the two Houses of Congress will be split between the Democrats and the Republicans. This will limit the new President’s room for manoeuvre.


What are the risks of another sovereign debt crisis in the eurozone?

•Eurozone debt looks sustainable, with the average real interest rate on eurozone debt lower than the eurozone’s real potential growth.

•Solidarity between eurozone member states has increased.

•The ESM and ECB have powerful tools to deal with a potential crisis.


What factors could challenge your scenario of lower inflation and lower interest rates?

•The main upside risk to inflation is wage growth. Leading indicators for labour demand suggest a significant decline that should limit future wage increases.

•The US presidential election is an additional risk for 2025.


Do you see more risks or more opportunities with regards to China?

•Many investors and asset managers remain severely under-allocated to China. Short covering and hence a decent bear rally can be expected.

•The property sector needs to show signs of stabilisation before the economy can be on a true path to recovery.

•There is hope that the monetary authorities can (and will) do more.

•In the near to medium term, more pro-growth policies can be expected. All eyes will be on the upcoming National People’s Congress on 5 March, which may provide further indications of the economy’s direction.