September 30, 2020

INVESTMENT VIEW Q4: THE NEW AGE OF FINANCIAL REPRESSION

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In Short

Given the surge in government and corporate debt, policy will inevitably focus on making this load sustainable: financial repression, spearheaded by central banks, is set to reach a whole new level. − Investors will need to navigate many icebergs this autumn: Covid uncertainties, a hard (or semi-hard) Brexit, the US elections and the risk associated to the crowding of positions (Growth stocks). So our positive risk bias is cautious.
INVESTMENT VIEW Q4: THE NEW AGE OF FINANCIAL REPRESSION
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Highlights:

  • Given the surge in government and corporate debt, policy will inevitably focus on making this load sustainable: finan-cial repression, spearheaded by central banks, is set to reach a whole new level.
  • Investors will need to navigate many icebergs this autumn: Covid uncertainties, a hard (or semi-hard) Brexit, the US elections and the risk associated to the crowding of positions (Growth stocks). So our positive risk bias is cautious.
  • Still, investors need to start looking beyond the Covid crisis. The economic recovery is set to continue, and supports a shift towards more cyclical assets, such as emerging currencies and equities. The USD may pause just now, but is in a structurally bearish trend.
  • Our largest overweight remains in Credit, where we recommend to go down the rating scale but not too much (BB).

Download the full publication below

INVESTMENT VIEW
THE NEW AGE OF FINANCIAL REPRESSION

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