Outlook 2023: IG analyst roundtable

(Partial video transcript)

The big themes

One of the big themes for 2022 has been volatility.

We've seen central banks act like they've never acted before. We've seen inflation rise to levels at a speed we've not seen in more than a generation. How is all this building up for 2023?

We thought we'd get together some of the big voices that we've got here amongst our IG team and talk together about what 2023 looks like.

Let's start off with IG's chief market analyst, Chris Beauchamp, with his thoughts on 2023, and what he thinks the big trade is going to be.

USD

If you look into next year, 2022 casts a long shadow really and it's the dollar that cast that shadow. It was the year the Fed moved into high speed with rate hikes, attempts to combat inflation. That is an ongoing battle and it really drove everything. It's not always the case that the dollar drives everything in market, but certainly 2022 was that year.

I think 2023 is the year when that starts to change, and the focus moves away simply from saying, 'Oh rates up, or pause on raising interest rates', and it moves into which assets begin to recover first, perhaps from any recession that develops.

I think that's the key thing to look out for and the FX market is that. I think you do question whether the dollar can sustain its ascendancy into 2023 now that if you like not they've stopped hiking rates but they certainly have slowed down their pace of hiking.

Okay let's pick up on another angle to all this and off now to our Johannesburg newsroom and IG senior analyst, Shaun Murison, who talks regularly to clients and has opinions. Shaun, what's your thought for 2023?

China

From our side, we're quite excited about what's happening in China at the moment. We are starting to see some reversals on major equity markets, the Hang Seng and the Shanghai Composite and obviously that is catalysed by loosening of Covid restrictions within the area.

And we're also starting to see some support and increasing promises of support for the property sector and obviously two major issues within the region which are stifling growth and we think that that could start to stimulate demand for commodities, in particular base metals. Copper and iron ore are ones that we are watching at the moment.

There is a thought that copper could move into deficit and obviously that would bode well for underlying miners of those commodities. The major miners of course BHP, Rio Tinto, Glencore, companies like that.