Asset Allocation: The first cut is the deepest... or is it?

  • A single 25bp US rate cut won’t be enough to boost growth, capex and inflation
  • But whether the Fed cuts 50bp in July or in two steps is not too important
  • What matters is that the trade war truce slims the downside-risk tail…
  • …while synchronised central bank easing fattens the upside-risk tail
  • We add exposure to equities, HY and EM bonds; cut govvies, IG and cash
  • Yields are too low but likely ECB QE, shortage of HQLA cap their upside
  • We stay positive on EUR as reserve diversification continues
  • In currencies we upgrade CNY, TWD and TRY, downgrade GBP and CAD

Economics

Politics

05 Apr 2019

Russia: Labour fix

Markets

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We have a 30 year track record of successful calls. Many of these calls combined economic, political and market analysis.

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