Welcome to the annual review and outlook edition of THE TREASURY HUB Markets Bulletin.
The main story of 2023 was inflation and (its impact on) interest rate trends. Central Banks have stalled their tightening of interest rates and there is now broad consensus that the interest rate cycle has peaked and that the next moves will be a cut.
- 3-month Euribor entered into a tight range around the 4.00% level but actually eased back a little in the last 2 weeks of 2023. ECB is still saying that there may be another hike if inflation doesn’t come back to 2% but the financial markets do not believe that position
- EUR, UK and US yield curves are all inverted after 1 year and eased faster than in previous months over the last 4 weeks of the year
- Oil fell over the course of the year while Carbon also dropped but rallied recently
- Gold has hit an all-time high
Outlook for 2024:
- Politically 2024 will be challenging in both the UK and US.
- Currencies benefit from stable politics, higher (relative to their peers) interest rates, trade trends, etc. These could go either way for a few major currencies.
- GBP could hold up, especially if Labour get in with ease and make pro Europe soundings.
- AI will be one of the main stories as it is increasingly used by a wider population - but watch its misuse in elections globally.
- Geo politics will be huge, not just the outcome of elections (Europe, UK, US) but developments in Ukraine, Taiwan, Red Sea, etc. As a result, disruption to logistics channels is a higher than currently forecast risk.
- Irish banks to remain conservative in their lending.
- Uncertain external environment will lead to more “stress testing” of loan applications and slower lending processes again.
Contact Us:
Please get in touch with our Corporate Finance team if we can be of any assistance.
- The Treasury Hub - 2023 Review and 2024 Outlook Bulletin can be downloaded here.
