Executive summary
- We remain bullish on DM equities, led by the US and then Japan, with Europe lagging. The prospect of positive equity returns from Japan reflects rising economy-wide profitability and robust exports.
- Asia ex-Japan expected earnings growth has slowed significantly, but underpinned by favourable performance across Taiwan, India, China and Singapore.
- Asia should benefit from improving competitiveness, strong demand from DM, and rising intra-Asia trade. Headwinds can stem from the possibility that China’s stimulus disappoints, or from adverse spillovers from US trade tariffs.
- We are positive on global sovereign bonds given the possibility that yields settle at levels that provide a favourable income-stream. Sovereign bonds may also provide some cushion if equities fall sharply.
- We also maintain our positive outlook for Asia investment grade corporate credit, as default rates can remain modest with a ‘soft-landing’ for global growth.
Our Q1 2025 investment views in a nutshell: hear from our Head of Investment Strategy
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