At a glance
- US economy more robust than expected. Mini recession likely in mid-2023, soft landing possible. Upswing in 2024.
- Europe: Gas situation eases. Mild setback in winter, new upswing from summer. Inflation slowly declining.
- Central banks: Interest rates will peak in mid-2023. US Fed cuts rates from end of 2023, ECB rates remain high.
- Equity markets defend gains, but the air to the upside is thinner. Outperformance of European and value equities.
- Economic challenges and monetary policy are likely to cap earnings growth and valuations across the board.
- Risk-reward ratio not particularly attractive. We have reduced the equity quota to a slight underweight.
- Yields rise on robust economy and steadier inflation. Yield on 10-year treasuries above 4% for a short term.
- Corporate bonds a real alternative to equities with attractive yields. Local currency bonds preferred in emerging markets.
- We are now only slightly underweight in bonds following recent purchases.
- Gold burdened by stronger USD and higher real interest rates. Upside potential fundamentally limited in the short term.
- Oil maintains sideways movement since December. Supported in the medium term by China recovery and restrictive producers.
- Base metals suffer from slow China recovery. Stronger China data in Q2 and tight supply should support.
- The EUR seamlessly continued its upward movement in the new year before strong US data led to a slight correction.
- The GBP cannot hold its recovery gains and falls back again against the EUR.
- At times, the EUR was trading above parity again against the CHF. Most recently, it went down to around CHF0.99 per EUR.