- Hawkish speeches at Jackson Hole have poured cold water on nascent hopes that policy setters may blink soon amid rising recession risks.
- Equity valuations and (thus far resilient) earnings will face stiffer headwinds into winter, with a recession in Europe looming amid an energy crunch and higher rates.
- Investor positioning remains very bearish, leaving scope for selective bounces. Yet we still favour an underweight in riskier assets. Strong demand for the stretched USD is unlikely to reverse soon.
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