Market Compass
September 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.

Highlights

  • The rally in risky assets is likely to flatten out. Rising new infections into the autumn and political risks (US politics, Brexit, Greece-Turkey confrontation) will hit sentiment.
  • Yet recovering data, committed central banks, falling Covid-19 lethality and optimism about vaccines still support a slight pro-risk bias.
  • We keep a prudent over-exposure to risky assets, centered on high-quality buckets of Credit.
  • Longer term, we look to increase the pro-cyclical bias in portfolios as the Covid paralysis fades out.
Market Compass September 2020

Related insights

COVID PARALYSIS RECEDES AS POLITICAL RISK RISES
After a buoyant August for risk assets, the rally is likely to flatten out. Rising new infections into the autumn, a leveling recovery pace and diverse political risks (US politics, Brexit, geopolitics) will keep a lid on risk sentiment.
GLOBAL VIEW – ENJOY SUMMER WHILE IT LASTS
As lockdowns have been lifted and global activity rebounded from the Q2 nadir, hopes of a strong recovery have helped risk assets advance further over July.
INVESTMENT VIEW Q3:
COV-IDEOLOGIES
After the rescue. As we enter the 20H2, Covid-19 is still lurking around, and influ-encing our social and economic behaviours. The number of new daily cases globally is at a new high.