Market Compass
February 2019

Edited by the Macro & Market Research Team.
The team of 13 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:

  • Disappointing macro data and political uncertainties (trade war, Brexit, US government shutdown) offered little support to global markets into the new year.
  • Yet risky assets have rebounded from a panic sell-off in December. More dovish central banks, Chinese policy support and hopes of a US/China trade deal are reassuring investors that policy makers will address downside risks.
  • We subscribe to Fed’s Powell underlying message: patience is a virtue. Equity prices, while stronger, still reflect a too gloomy outlook, in our view. Core yields are very low and there is scope for a moderate rise.
  • We trim but retain a pro-risk allocation tilt, slightly reducing our underweight in govies and keeping an overweight in credit.
MARKET COMPASS FEBRUARY 2019

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