Market Compass March 2019

Edited by the Macro & Market Research Team.
A team of 13 analysts based in Paris, Cologne, Trieste, Milan and Prague runs qualitative and quantitative analysis on macroeconomic and financial issues.

The team translates macro and quant views into investment ideas that feed into the investment process.

  • Risk assets have recovered in full, despite the slump in exports and industrial data. This rally still has some potential for now.
  • Global risks still abound (not least the US/Euro Area trade spat), but the near-term outlook appears rather friendly. We remain confident that a sharper global downturn will be avoided.
  • Importantly, low inflation has helped central banks turn more dovish, creating the conditions for a ‘mini-Goldilocks’.
  • We keep a pro-risk bias, with a prudent overweight in equities and an underweight in Govies. Also, we trim our short-duration bias especially in credit, where a steeper credit curve makes longer-dated Euro Investment Grade more attractive. Finally, we further reduce the cash overweight.
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