Economics:
- The omicron wave brings further restrictions to the economy. The upswing is interrupted.
- Inflation reaches its peak. The no-covid policy in China poses risks - intermediate products may become scarcer.
- The surge in prices forces the central banks to turn around. The Fed and BoE march ahead, ECB remains hesitant.
Equities:
- The start of the year was marked by rising interest rates and a strong style rotation. Europe held up better than the US.
- More restrictive central banks pose a real threat to high valuations. Equity market returns are likely to be lower.
- We remain cautiously optimistic with a slight equity overweight, even though the market is likely to remain volatile.
Bonds:
- Bond sell-off in response to tighter Fed statements. Yield rise was driven by real interest rate rise.
- EM bonds caught between economic recovery and rising US interest rates. Spreads have risen.
- We underweight bonds and remain cautiously positioned on credit risk. Duration: short.
Alternative investments / commodities:
- Omicron worries have subsided. Today, supply concerns surrounding the Russia-Ukraine conflict dominate the oil market.
- Gold was in demand again thanks to geopolitical risks but continues to react sensitively to the interest rate outlook.
- Industrial metals remain scarce, as inventories show. High energy prices are likely to have an impact this year.
Currencies:
- For the euro, the way up remains rocky. The Fed's January meeting boosts the dollar.
- The Bank of England tightens. The pound can gain - at least temporarily. Sideways movement is likely.
- The euro initially gained against the swiss franc. Now, however, the gains have been eroded again.
