This time last year, Tim Toohey (Head of Macro and Strategy), was pretty optimistic that 2024 would present as a year of better economic growth, easing inflation pressures and strong asset returns. In short, he suggested that 2024 was set to surprise as the year of ‘reflation’ for economic growth and for risk assets and he pointed to a few factors that would help drive that outcome.

These included an acceleration in the global industrial cycle, led by emerging economies, improving global credit creation, the likelihood of interest rate reductions in major economies from mid-year and the belief that China would ramp up its efforts to stimulate its economy as the year progressed. While all of these happened, 2024 will of course be remembered as the year financial markets welcomed the second Trump victory and the ongoing fascination of all things AI and big Tech.

All of these proved to be powerful forces with global equity markets on track to record 25-30% returns in calendar 2024, making the year the strongest returning year since the 2009 recovery from the Financial Crisis.  Looking back, there is no question 2024 was a year of financial market reflation.

The big question is what comes next?