Fidelity International

Sustainable investing has been challenged on many fronts over the last 12 months and we expect conditions to remain volatile in 2023.

As the Federal Reserve attempts to get a grip of soaring inflation in the US, the dollar’s appreciation has sucked capital away from other regions.

Bond yields are finally starting to look attractive again but are they priced for the scale of the downturn ahead?

We expect a high degree of volatility and uncertainty for global equities in 2023, as stubbornly high inflation and interest rate rises lead to a rough landing for large parts of the global economy.

Inflation has dogged markets this year and is likely to remain high, bringing an end to the era of easy money and increasing the risk that overtightening by central banks will trigger a sharp recession, an ‘inflation bust’.

It is 14 years since the Fed and other central banks ushered in an era of ultra-low interest rates and bond yields in response to the Global Financial Crisis.

The European Central Bank’s 75 basis point hike in October may be its last jumbo move as the threat of recession looms large over the Euro Area.

Markets have seen significant moves following the end of the Communist Party Congress but the week’s events leave a more nuanced picture.

Asia’s key economies are insulated to a degree from the struggles facing Europe, with less inflationary headwinds. The 20th Party Congress in China could also herald more policy clarity and assertiveness in government stimulus.

Ratings that score companies based on environmental, social and governance factors have come under fire because they often diverge or disagree from one provider to the next.