Syz Bank global market outlook

US futures are pointing towards a positive open following a positive close on Tuesday, indicating that the market is currently not concerned about an escalation of tensions between Ukraine and Russia. The recent rocket strike in Poland near the Ukraine border, which led to market fluctuations, did not escalate tensions significantly. President Joe Biden's comments that the rocket was unlikely fired by Russia provided some relief. To provide more insights into what is moving the global markets, Charles-Henry Monchau, the Chief Investment Officer at Syz Bank, joined CNBC Africa for a detailed discussion. Monchau shared his views on various market aspects, including the current situation between Russia and Ukraine, market positioning for the upcoming year, prospects of a soft landing amid tightening monetary policies, and the potential impact of former President Trump's announcement of a possible comeback. Monchau highlighted that despite the recent tensions, the market seems to have already digested the situation, with no major escalation observed following the rocket incident in Poland. He emphasized that while there is a lingering war situation, the market sentiment does not reflect extreme risk pricing at the moment. Looking ahead to 2023, Monchau mentioned a cautious optimism, citing positive market flows and expectations for a potential stabilization in risk assets. He expressed a preference for credits over equities and emphasized the importance of selective asset allocation given the ongoing monetary policy tightening. Discussing the prospects of a soft landing amid rising inflation, Monchau noted that while recent inflation data provided some relief, the risk of over-tightening still remains. He mentioned the possibility of a 50 basis point increase in the next interest rate hike by the US Federal Reserve and highlighted the significance of monitoring the Fed's balance sheet activities. Monchau also drew comparisons with the UK's unique monetary policy approach, indicating potential implications for the US going forward. When asked about the potential impact of former President Trump's announcement on the market outlook, Monchau discussed the historical trends in the four-year presidential cycle and how government actions ahead of elections can influence equity markets. He noted that the current phase in the cycle could see improved fiscal and monetary policies, impacting market dynamics and investor sentiment. Monchau suggested that market participants are already positioning for potential government support, indicating a more favorable environment for equity markets. In conclusion, while geopolitical tensions and monetary policy decisions continue to influence market sentiment, analysts like Monchau are closely monitoring various factors to navigate the evolving landscape and identify investment opportunities amidst uncertainty.