Vast Majority On Wall Street Think Next 100bps Move In 10Y Yields Is Lower

The Deutsche Bank October 2023 global financial market survey, conducted between the 3rd and 6th of October, had 410 responses from around the world. Survey organizer Jim Reid took a look at expectations of central bank policy error, US recession risks, and financial market forecasts. The bank also looked at the topic of the day, AI, before moving to inflation expectations. Professional subs can read the full survey at their leisure at the following link, for everyone else here are the highlights:

• 75% think the next 100bps move in US 10yr yields is lower (average yield 4.75% during the survey). A big turnaround from June’s results where a small majority expected 4.5% before 2.5% when we were halfway between the two. Well done to that small majority as it got there in just 3 months.
• 72% think the next 10% move in the S&P 500 will be lower. Slightly less than in June. In March 76% thought the next 10% move would be up so a different mood to earlier this year.
• The US recession call has been pushed back into 2024 more than it has been removed from forecasts.
• The perceived risks of a hawkish policy error continues to increase for the Fed and the ECB with the former now at 50% and the latter at 55%.
• As a result of this and higher yields, the perceived risk of global accidents continues to be high.
• The adoption of ChatGPT has slowed but expectations of Gen AI’s ability to increase productivity continues to be high, especially beyond 5 years' time.
• The probability of Mr Trump being President after the 2024 election has increased from 36% in June to 46% in our latest survey.
• Finally, since we last asked a Future of Work question in December 2022, days worked at home are fairly stable suggesting that a steady state has emerged for now.

More in the full survey available to pro subs.