Economics:
- Russia invasion delays recovery. Uncertainty and higher prices weigh on the economy.
- Price increases continue. Energy and food prices are drivers. Several months of stagflation loom
- Central banks are forced to reverse course. Monetary policy is tightened - in Europe, however, only moderately so far.
Equities:
- Markets were again burdened by recession concerns due to rising interest rates and China risk as well as the Putin war.
- Companies can surprise positively in the current Q1 reporting season. However, the outlook is becoming more difficult.
- A challenging global situation let us remain cautious. However, the lows in sentiment and positioning should be supportive
Bonds:
- Government bonds burdened by restrictive interest rate policy of central banks. Renewed steepening of the US yield curve.
- Risk premiums on corporate bonds have recently risen again. Spread narrowing in emerging market bonds.
- We underweight bonds and remain cautiously positioned on credit risk. Duration: short.
Alternative investments / commodities:
- Oil embargo is imminent. However, supply is already tight. Prices and volatility are likely to remain elevated.
- Gold benefits from all kinds of uncertainties. Rising real yields slow it down, but are less dangerous with a restrictive Fed.
- Industrial metals temporarily weaker due to China lockdowns. Long-term supply shortage remains unaffected.
Currencies:
- The ECB remains hesitant. The euro will therefore probably remain under pressure until the ECB changes its key interest rate.
- The USD/EUR exchange rate has fallen to 1.05. The Dollar is benefiting from the prospect of rapidly rising rates.
- After initial gains at the beginning of the war, the yen has dropped significantly. The BoJ is stuck in a low interest rate trap.
