Market Compass February 2023

In Short

A team of analysts based in Paris, Cologne, Trieste, Milan and Prague runs qualitative and quantitative analysis on macroeconomic and financial issues. The team translates macro and quant views into investment ideas that feed into the investment process.

Highlights:

  • With the energy crunch easing and China heading for a reopening bounce, the euro area will likely escape a widely anticipated winter recession.
  • Yet the Fed’s fast monetary tightening will take its toll on a shallow US mid-year recession.
  • These divergent shifts in the macro outlook support a tighter transatlantic yield spread, a slight preference for Euro Area vs. US stocks and more upside for the EUR/USD.
  • Overall, however, elevated valuations and persistent headwinds to earnings keep us favouring a prudent stance on risk assets amid mounting signals of exuberance. Euro area IG Credit still looks attractive.

 

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Market Compass February 2023

The latest views, research and investment insights from our experts

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