Horizon Handout May 2022

Capital Market Outlook of Berenberg Wealth & Asset Management - compact outlook on capital markets, economy, equities, bonds, economics and currencies.


  • 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.


  • 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


  • 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.


  • 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.