Economics
- Mixed economic picture in the eurozone.
- UK economy on the upswing.
- US economy is set for a landing.
Equities
- Recession worries, negative summer seasonality and the unwinding of carry trades led to a sell-off at the beginning of August.
- Positive economic and central bank signals, share buyback programmes and low volatility then led to a V-recovery.
- Although the blackout period, seasonality and the US presidential election harbour setback risks, the improved economy and central bank turnaround also harbour upside potential. Balanced positioning is required.
Bonds
- Powell gives green light for interest rate cut in September. Demand for Chinese government bonds remains high.
- European corporate bonds remain fundamentally well supported.
- Weak dollar as tailwind for emerging market bonds.
Alternative Investments / commodities
- Geopolitics dominates oil prices in the short term, but OPEC+ determines the fundamental equilibrium.
- Gold is at all-time high thanks to lower real interest rates and a weaker dollar. ETF flows have reversed.
- Industrial metals recover despite weak manufacturing. More potential as industrial activity picks up.
Currencies
- Dollar falls after Powell greenlights September easing.
- Market expectations of Fed rate cuts somewhat exaggerated.
- Swiss National Bank and ECB in step.
