Well Fargo Released their International Economic Outlook on April 25th, 2023. 

Here is the summary along with the key themes from the report.

Summary

Forecast Changes

• We have once again revised our global GDP forecast higher, and in our view, the global economy is moving further away from entering recession. With China’s economy outperforming in Q1 and Eurozone growth prospects improving, we now forecast the global economy to grow 2.4% in 2023, up from 2.2% last month. The majority of global growth is set to come from Asia, specifically China and India, and we also no longer believe the Eurozone will enter recession this year.
• Central banks, on balance, have yet to make a meaningful pivot toward monetary easing. In fact, we revised our terminal rate forecasts higher for select central banks, such as the Bank of England, Reserve Bank of New Zealand and Norges Bank. In addition, we continue to believe risks are tilted toward central banks raising rates more than we expect, and the “higher for longer” theme is still very much a possibility.
• In our view, the U.S. dollar is experiencing multiple cross-currents that can result in a stable greenback through the end of Q2-2023. Longer term, we believe the Fed will lower interest rates more aggressively than peer central banks, which can place broad depreciation pressure on the dollar over the second half of 2023 and into 2024. We also believe emerging market currencies can continue to experience widespread currency strength going forward, with the best opportunities existing within high yielding currencies in Latin America and Emerging Europe.

Key Themes

• The global economy continues to display resilience and improving growth prospects. Relative to historical trends, the global economy is likely to experience subdued growth in 2023; however, prospects for growth have improved sharply over the first few months of this year. With China’s economy now likely to grow 6% this year and India likely to experience robust growth, the global economy is transitioning back to a place where Asia is once again accounting for the majority of global growth.
• Core inflation remains elevated in many parts of the world, leaving us to believe risks to our central bank terminal rate forecasts are still tilted to the upside. While we continue to believe select institutions can initiate easing cycles by the end of this year, we acknowledge that “higher for longer”—especially from the Fed—is still a relevant risk. For now, we continue to believe the Fed will lead central banks in cutting interest rates, outpacing peer central banks across the G10.
• Our view on the dollar has not changed much, and we continue to believe the greenback is on track for an extended period of depreciation into 2024. Following a brief period of stability in the short term, we believe interest rate differentials will be the primary source of dollar weakness over the longer term. While we are optimistic on G10 currency prospects, we believe emerging market currency strength will be widespread going forward. Select currencies in regions such as Latin America and Emerging Europe can outperform on elevated real interest rates and prudent central banks, combined with certain idiosyncratic developments.

You can read the full report here.