Highlights:

• Omicron is unsettling markets and uncertainty will remain high until the variant’s impact on Covid deaths and hospitalisations becomes clearer. 
• Central banks may delay their withdrawal of policy accommodation. But given the deteriorating growth/inflation mix and persistent global supply bottlenecks, the scope for monetary policy support is limited.
• Short term, we favour a very prudent tactical stance amid high uncertainty. But with the earnings outlook still decent and valuations supported by low real yields, the recent market correction may justify a cautious overweight in risk assets. 
• We still expect yield to rise but background risks will limit the upside.  

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