Market Compass
February 2020

Edited by the Macro & Market Research Team.
A 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.

  • Just as the US/China trade truce provided broad-based relief, the new Coronavirus in China is unsettling global financial markets.

  • The fast-spreading disease is challenging the global macro rebound, but we still see resilience in the US and Euro area domestic demand.

  • Experience from past episodes suggests that markets tend to overshoot, but rebound once the number of new infections starts to slow.

  • We favour a more cautious stance near term. We maintain a moderate pro-risk tilt in the portfolios, but reduce our exposure to Equities and HighYield (HY) Credit. We keep our overweight in higher rated corporates andan underweight in government core bonds.

MARKET COMPASS FEBRUARY 2020

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