uncertainty around the election of a new European Parliament in 2024 , with far-right candidates gaining traction in recent months .
Could far-right candidates , if successful , reshape the European landscape for climate policy and lead to a more conservative Brussels ?
This adds to today ’ s economic picture of disparity and uncertainty . The changeability of political policy and shifting trade allegiances , alongside a lag in the pinch on credit , and a divergence between bonds and equities points to an uncertain economic outlook , one which could unpredictably affect FX rates globally .
Most forward-looking indicators – like the Purchasing Managers Index , the Conference Board ’ s Economic Index , and yield curves across government bonds – point to high recession probabilities in
2024 , while backward-looking indicators continue to perform well .
The last four recessions have been preceded by circumstances that are currently in place , such as tighter US Federal Reserve monetary policy , the New York Federal Reserve ’ s recession probability indicator rising above 30 %, the Conference Board ’ s US Leading Economic Index falling below -5 , over 50 % of US bond yield curves inverting , and the US ’ CEO Confidence Index falling below the key 40 threshold . Nevertheless , consumer spending has remained resilient and global stocks have appreciated , with the Nasdaq surging .
So , amid the divergence and uncertainty today , what outcomes should we expect in 2024 , and how could these potential outcomes affect FX rates ? Get a copy of our full report : Are you ready for 2024 ?
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