The world futures market in 2023 is an ever-evolving entity, and it is a constantly changing landscape that can be difficult to navigate. In this article, we will explore some of the factors that professionals like Kavan Choksi say may influence the market in the coming years and take a closer look at what we can expect in the future.
Introduction to the Futures Market
Before we delve into the world futures market in 2023, it is important to understand what the futures market is and how it works. The futures market is a financial market where individuals and companies can trade futures contracts, which are essentially agreements to buy or sell a particular asset at a predetermined price and time in the future.
The futures market can be divided into two main categories: commodity futures and financial futures. Commodity futures are contracts for the delivery of physical commodities such as oil, gold, or wheat. Financial futures, on the other hand, are contracts based on underlying financial instruments such as stock indices, currencies, or interest rates.
Factors Affecting the World Futures Market in 2023
There are a number of factors that may influence the world futures market in 2023. Some of the most important ones are discussed below.
Global Economic Growth
One of the key factors that could impact the futures market in the coming years is global economic growth. Economic growth can drive demand for commodities and financial products, which can, in turn, drive futures prices higher. The IMF predicts that global economic growth will be 4.4% in 2022 and 3.8% in 2023, which may indicate a slight slowdown in the growth rate, although it remains to be seen how this will impact the futures market.
Climate change is another important factor that could have a significant impact on the futures market in 2023. As the world continues to experience more frequent and severe weather events, the demand for commodities such as agricultural products, energy, and insurance could rise, leading to higher futures prices. At the same time, efforts to combat climate change may also create new opportunities for trading in areas such as renewable energy and carbon credits.
Geopolitical risk is always a concern for investors, and it is likely to remain an important factor in the futures market in 2023. Tensions between the US and China, for example, could impact the prices of commodities such as soybeans and crude oil, as both countries are major players in these markets. Other potential sources of geopolitical risk include conflicts in the Middle East and tensions between Russia and the West.
Technology and Innovation
Finally, technology and innovation are likely to continue to shape the futures market in 2023 and beyond. New technologies such as blockchain and artificial intelligence are already being used to streamline trading processes and create new financial products. As these technologies become more widely adopted, they may have a significant impact on the futures market and how it operates.