4 Macro Themes for Q1

Going into 2023 there are a few macro themes that I think are most relevant for markets going into the first quarter of this year. Markets seem to be setting up for a much more differentiated year than we saw last. The dollar and rates dominated market themes for much of 2022, and everything else was pretty much just beta. 2023 is shaping up to be much different, as a I noted in my last blog post about the upcoming central bank divergence.

Pretty much every central bank in 2022 recognized that they have an inflation problem and embarked on an aggressive tightening campaign to catch up to it. 2023 is shaping up be a bit different. Inflation is still a problem of course, but how much more to do, how long to stay restrictive, how well does growth hang in? These are all going to be questions that have different answers for respective central banks in the coming year.

Now, I want to highlight some early next year market themes that I am watching into Q1 2023. I think there are four key ones: