Citi Research: “Maintains a 50% probability of a synchronized global recession in 2023”

The boys and girls at Citi have been out today, giving us their latest view on the global outlook and commodities.

Citi research:

Maintains a 50% probability of a synchronized global recession in 2023

At country level, base case calls for series of “rolling recessions” with measurable downturns in EU and UK this winter and in the US by mid-2023

Energy, base metals subsectors tend to underperform broad-based commodities both before, during recession as most downturns are accompanied by demand destruction

However, energy and base metals subsectors strongly outperform in the year after recession ends

“Volatility of commodities sector increases slightly going into a recession and more than doubles once recession starts”

“Volatility of energy sector nearly triples during a recession, on average, while that of precious metals increases by about 50%”