Horizon Handout April 2022

Capital Market Outlook of Berenberg Wealth & Asset Management - compact outlook on capital markets, economy, equities, bonds, economics and currencies.


  • Russia invasion delays recovery. Uncertainty and higher prices weigh on economy.
  • Price increases continue. Energy and food prices as drivers. Several months of stagflation loom.
  • Central banks forced to reverse course. Moderate tightening of monetary policy implemented.


  • Negative investor sentiment and low positioning have supported equities recently.
  • Non-fundamental investors are likely to add to equities as volatility falls. Fundamentally, however, the tailwind is weakening.
  • We had increased our equity weighting in the wake of the sell-off, but now see only limited upside potential in the short term.


  • Safe government bonds continue to lose ground beyond temporary hedging demand. Emerging markets attractively valued.
  • In the medium term, we see potential for corporate bonds due to reduced supply and after valuation correction.
  • We are underweight bonds and remain overweight emerging market bonds. Duration: short.

Alternative investments / commodities:

  • Russian oil is still flowing to the West. However, supply is already tight. Prices and volatility are likely to remain elevated.
  • Gold benefits from all kinds of uncertainties. Rising real yields slow it down, but are less dangerous with a restrictive Fed.
  • Industrial metals markets benefit from high oil and gas prices. The decarbonisation trend accelerated with war.


  • Safe-haven currencies (US dollar, Swiss franc) are in demand again due to Russia-Ukraine crisis.
  • The euro recovers slightly from its lows of 1.08 US dollar per euro and 1.00 Swiss franc per euro.
  • For the euro, the way up is rocky. Geographical proximity to the crisis region is a burdening factor.