Economics
- President Trump's customs policy is jeopardising the upturn in the eurozone and, in the medium term, the domestic economy.
- Domestic demand in the UK is strong, but exports are weak.
- Central banks are almost at the end of the line with interest rate cuts but are keeping all options open in uncertain times.
Equities
- No regional preference in the short term following the fundamentally and valuation-driven outperformance of Europe.
- Europe relatively favourably valued, but USA supported by weaker USD and rebalancing flows at the end of the quarter.
- A possible US economic slowdown in Q2 and trade disputes could noticeably increase volatility.
Bonds
- The scope for monetary policy remains small for the Fed. Germany and the UK, however, appear attractive again.
- Corporate bonds remain interesting thanks to their attractive real yields. Low risk premiums jeopardise the short term.
- Emerging market bonds should receive a tailwind due to brightening economic data from China.
Alternative investments / commodities
- There is plenty of supply on the oil market, but not at every price. Sideways movement likely for the time being.
- Gold tops USD 3,000 per ounce. Global uncertainty and rising government debt provide support.
- Defence and infrastructure spending should further boost demand for industrial metals in the long term.
Currencies
- Geopolitics and trade policy move the currency markets.
- Europe and the euro emerge from their state of shock.
- The Swiss National Bank tries to counter low inflation and the strong franc.
