- After a strong Q3 rebound on reopening businesses and pent-up demand, the pace of the recovery will slow – especially in services.
- The Fed’s strategic turn towards average inflation targeting (AIT) and asymmetric employment target induces a long-term dovish bias in monetary policy, with rates to remain close to zero for years. The ECB is likely to take a similar approach.
- Despite looming political uncertainty, the upcoming policy action (ECB, US fiscal) and continued economic recovery may favour cyclical assets, while central banks will keep rates range stable.
- Our largest overweight remains in Credit, where we recommend to go down the rating scale but not too much (BB). The US dollar has temporarily stabilized, but the trend is bearish.