
Opening Note
2023 is expected to start off on an uncertain note as investors eye a potential recession, inflation trends, and global central banks’ monetary policy paths.
Geopolitical tensions will also need to be assessed, with the Russia-Ukraine conflict set to drag on beyond the one-year mark. While things remain fluid over contentious issues such as US-Sino tensions and US semiconductor curbs on China, an amicable meeting between US President Biden and Chinese President Xi at the November 2022 G20 Summit has raised hopes of an improvement in US-China bilateral ties.
Assuming China continues its re-opening path post-COVID, and global central bank tightening slows, the storm clouds may start to break, resulting in a short and shallow recession in 2023. While there are still many variables at play, a greater sense of clarity may start to emerge as we approach the second half of the year.
As volatility is expected to spill over into the new year, steering your portfolios may be challenging. Let our investment insights help you make sense of the noise and build strong foundations for brighter days ahead.
Winston Lim, CFA
Singapore and Regional Head
Deposits and Wealth Management
Personal Financial Services

2023 Market Outlook video
What will the market landscape look like in 2023, and should you approach investing with caution or optimism? Learn more in our 2023 Market Outlook video.

2023 Macro Outlook
The global economic outlook is set to be weaker in 2023, hampered by high inflation and aggressive monetary policy tightening by major central banks. From a top-down perspective, the main talking point for 2023 is whether global recession risks become reality, and whether the contraction will be shallow or deep, short or sustained. Our view is that any recession will be shallow and short.
2022 was a year of elevated volatility, where simultaneous sell-offs in global equities and bonds left investors with no place to hide from the storm.
Will this continue into 2023, or will we see a return to the negative stock-bond relationship seen in the past two decades?
The long-term trend reveals that stock-bond correlations depend on inflation. Assuming inflation declines over the coming year, a return to a negative correlation should play out, especially if a recession were to hit, as that will benefit bonds. If so, portfolio allocations should become less tricky in the year ahead.
Indeed, we may see some respite in 2023 from surging inflation and aggressive monetary policy tightening. Headline consumer price index (CPI) inflation should generally peak and trend lower owing to a high base of comparison, while the pullback in commodity prices will also help. This should then allow central banks to slow and pause their tightening cycle.
Overall, an uncertain first half of the year may give way to more clarity by the middle of the year, and set up a more conducive backdrop for risk assets in the second half of 2023.
As such, investors may be well served by slowly accumulating risk assets, buying on dips to position for the next upward cycle, with an initial focus on defensive and quality growth stocks.
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2023 Outlook
Explore what lies ahead for the economy and global financial markets in 2023.

Trending Topics of Interest
Discover key developments that could move markets in the year ahead.

What Investors Can Do
Learn how to build a resilient portfolio consisting of Core and Tactical investments, based on your risk appetite.

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Credits
Credits
Managing Editor
- Winston Lim, CFA
Singapore and Regional Head,
Deposits and Wealth Management
Personal Financial Services
Editorial Team
- Abel Lim
Singapore Head,
Wealth Management
Advisory and Strategy - Michele Fong
Head, Wealth Advisory and Communications - Tan Jian Hui
Investment Strategist,
Investment Strategy and Communications - Low Xian Li
Investment Strategist,
Investment Strategy and Communications - Zack Tang
Investment Strategist,
Investment Strategy and Communications
UOB Personal Financial Services Investment Committee
- Singapore
- Abel Lim
- Ernest Low
- Michele Fong
- Tan Jian Hui
- Low Xian Li
- Zack Tang
- Jonathan Conley
- Alexandre Thoniel, CAIA
- Chen Xuan Wei, CFA
- Christine Ku
- Daphne Chan
- Jaime Liew
- Shawn Tan
- Marcus Lee, CFTe, CMT
- Ivan Hu
-
Malaysia
- Joel Tan
- Thailand
- Suwiwan Hoysakul
- China
- Huang Li Li
- Indonesia
- Diendy
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