Market Compass January 2021
- After a weak Q1, vaccine rollout and – especially in the US – further fiscal stimulus will allow the economy to rebound strongly later in spring.
- Monetary policy will remain tilted to accommodation: central banks’ bond purchases will continue until the activity is on a strong footing.
- Moreover, the reduction of political uncertainty in the UK and US warrants an increase in exposure to risker assets.
- A deeper weakening of US dollar favours exposure to Emerging Markets (EMs); reflation expectations make cash and core Government Bonds unattractive.