Despite a tightening-induced plunge in 2022, global equities commenced 2023 on a strong footing. Specifically, MSCI World and Emerging Markets indices appreciated by 7.0% and 7.9%, respectively, in January 2023 (vs -4.3% and -1.6% in December 2022). This equity turnaround was primarily driven by the moderation in inflation (particularly in the U.S. and the Eurozone) that raised hopes for temperance in hawkish monetary policies. In addition, a flurry of positive earnings releases amid strong Q4'22 economic growth numbers in the U.S. and China, and a better-than-expected outturn in the Eurozone boosted risk appetite.

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