November 29, 2019

Goldilocks ‘light’

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In Short

Receding political risks, tender economic greenshoots and accommodative central banks haveunderpinned risk assets, benefitting our pro-riskstance.
Goldilocks ‘light’
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Highlights:

  • Receding political risks, tender economic greenshoots and accommodative central banks haveunderpinned risk assets, benefitting our pro-riskstance.
  • Markets are already discounting a lot of good news, warranting a somewhat more cautious tactical allocation stance into year-end.
  • That said, a Goldilocks ‘light’ environment is still boding well for risk sentiment. Low inflation, bottoming but subpar growth and sustained monetary policy support will keep a lid on core yields while still underpinning risk assets.
  • We maintain overweight in Credit and Equities vs. Core Govies and Cash, but reduce the size of active positions.

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GOLDILOCKS ‘LIGHT’

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