Central banks set the tone

Economics

• US: The Fed has hesitated for a long time, now it is stepping hard on the brakes. Mild US recession in 2023.
• Putin cuts gas supply. High gas prices hit Europe hard. Recession until spring 2023, recovery afterwards.
• US-Inflation peak reached. Euro inflation to rise until the end of 2022. Price pressure decreases strongly from spring 2023.

Equities

• Equities burdened by ongoing restrictive interest rate policy after summer rally. Limited drawdown risks below annual lows.
• End of reporting season means markets shift focus to macro data and central banks. Volatility is likely to rise.
• We are slightly underweight in equities, but with a tendency to neutralise. Recovery potential in the event of a rate pivot.

Bonds

• Inflation concerns once again dominate markets. Yields on safe government bonds have risen noticeably recently.
• Corporate bonds are attractive over the long term. Emerging market bonds have weakened, but held their ground in relative terms.
• We maintain our less severe underweight in bonds and position ourselves close to neutral in duration.

Commodities

• Gold recently burdened by USD strength and central banks' rate policy. Recession scenario holds upside potential.
• Oil price supported by supply shortage and new demand. OPEC cuts and gas substitution exacerbate deficit.
• Metals weighed down by China lockdowns and recession. If the trend reverses, the recovery should come quickly.

Currencies

• The euro under pressure ahead of the ECB's September meeting. Could a big interest rate move turn the negative sentiment?
• Parity with the US dollar is now the new reality. For the time being, significantly higher quotations are unlikely.
• Against the franc, the euro has fallen well below parity due to political risks and the ECB's hesitancy.