- The Eurozone economy is growing as expected. At a solid 2%, the temporarily higher inflation rate remains moderate.
- In contrast, inflation in the US is remarkable. At more than 5%, the central bank cannot remain inactive for much longer.
- The Fed will implement its exit from emergency policy cautiously so as not to stall the economy.
- Western stock indices reach new all-time highs mainly driven by fundamentals. Chinese regulation weighs on emerging markets
- Positive earnings revisions in cyclical market segments as a result of the reporting season no longer trigger outperformance.
- Declining economic growth is increasingly shifting the focus to more defensive and structurally growing market segments.
- The summer low in yields on safe haven government bonds seems to have been overcome. Duration should be kept short.
- Spreads on IG bonds offer little potential. High-yield bonds have stable spreads despite existing risks.
- In emerging markets, we favour high yielding government bonds and the local currency segment.
Alternative investments / commodities
- Spread of delta variant pushes oil price down. Existing supply shortage speaks for prices rising again.
- • Gold anticipates tighter monetary policy. With real interest rates rising, potential remains limited. Valuation: fair.
- Industrial metals suffer from concerns about an economic slowdown. Structural, positive trends remain intact.
- The US dollar benefits from the prospect of a reversal in monetary policy. The ECB will be able to take more time.
- The British pound has slightly weakened recently. However, it remains in a narrow range at 0.85/0.86 pounds per euro.
- The Swiss franc is again benefiting from Covid-19 worries and geopolitical uncertainties.