Niall Paul

Market Outlook

International Outlook


Latest International economic and market outlook. 


The fund remains well balanced, with a defensive tilt and a beta of 0.92 at the time of writing.  Broader markets continue to move higher, but the breadth within them is extremely narrow, and we do expect to see further volatility in the months ahead. We therefore retain overweight exposure to Staples, Defensives and Utilities, with underweight positions in Financials and cyclicals more generally. 

Our base case is that inflation in the US has peaked, and that interest rates are very close to doing so. With economic data continuing to surprise on the upside, we also expect the US economy to see a soft landing, which would be a laudable achievement given the scale and speed of rate hikes. As US rates peak and the dollar weakens, this should be a supportive environment for EM equities, particularly as central banks across EM are now leading the world in cutting rates. Over the last month, we have seen Chile and Brazil surprising the market with 100bps and 50bps cuts, respectively. Both central banks indicated that there is more to come if inflation remains well behaved. Given our expectation that EM equities will perform relatively well, we have exposure to long-duration assets in Brazil that should benefit from falling rates, as well as Indian banks, which we expect to grow faster than the wider economy due partly to low levels of credit penetration. 

Important Information:
Nothing in this document constitutes or should be treated as investment advice or an offer to buy or sell any security or other investment. TT is authorised and regulated in the United Kingdom by the Financial Conduct Authority (FCA).

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