Highlights:

• Despite stretched investors’ positions and residual risks from Covid-19 mutations, the Spring rebound to support favourable financial conditions.
• Fears of soaring US inflation pose risks for fixed income.
• Equities should prove resilient, but the pick-up in real yields deserves to be watched, especially for the impact on highly valued risk assets.
• Overall, we maintain a moderate pro-risk tilt in our portfolios, with potential equity setbacks providing buying opportunities into a broader ‘Spring reopening’.

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