Economics
- The Eurozone economy is regaining momentum only slowly after the near-stagnation of 2023.
- Lower inflation and expected interest rate cuts are setting the stage for the British economy to make up for lost ground.
- The US economy is thriving despite a restrictive monetary policy.
Equities
- Equity markets have recently corrected slightly. US equities have fallen more sharply than their European counterparts.
- We have used the recent weakness to neutralise our equity exposure and reduce our US underweight.
- Until the US elections, we expect a volatile sideways movement with limited upside potential.
Bonds
- Interest rate cut expectations for the Fed further reduced in view of stubborn inflation data in the USA.
- Idiosyncratic stress in the high-yield corporate bond segment. IG fundamentally and technically well supported.
- Positive economic data in the emerging markets continue to make the local currency bond segment attractive.
Alternative investments / commodities
- Gold defies higher real interest rates, a firm dollar and ETF outflows. Hot in the short term, but still an important hedge.
- Crude oil in a sideways trend without geopolitical escalation. Supply and demand currently appear to be in balance.
- Industrial metals benefit from recovery in the manufacturing sector and ban on Russian metal. Overheated in the short term.
Currencies
- Several factors are currently giving the US dollar a tailwind.
- The markets have already priced in that the Fed will start cutting interest rates much later than the ECB.
- In the coming months, some of the factors currently supporting the US dollar could weaken.
