UBS' outlook for the Federal Open Market Committee (FOMC):

  • We are looking for three rate cuts through the course of 2024.
  • But where we are really different from consensus, where the market is again looking for about three cuts in 2025, we are looking for five cuts in 2025

More immediately, on the NFP and more:

  • this week we are going to see nonfarm payrolls data which we think is going to be near term quite strong
  • in asset allocation terms, we are very much bonds over equities across all regions, but particularly so in the US
  • We do think in the near term the earnings picture for the US market looks reasonably strong and then ironically through the rest of the year we are actually going to see tech earnings momentum come a little bit lower and it broaden out to the remaining parts of the market. So the the market should remain reasonably steady, but at a time when bonds are rallying, bond should outperform equities over the next 12 months. And we feel that that's the case for the US. We do think that's the case for Europe.
  • China is a completely different conversation. So I don't think we can throw in China or Asia more broadly into that conversation. I think China and Japan, these are places where we certainly prefer equities over bonds.


UBS Chief Strategist Bhanu Baweja spoke with Bloomberg TV.

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