Viral uncertainties

The Covid-19 virus is turning from a regional health crisis to a global issue; uncertainties about the global economic impact have been rising sharply. After weeks of resilience, equity markets have sold off in late February, catching up with the safe-haven rally in core bonds seen earlier.


  • With Covid-19 going global, we scale back the previously cautious pro-risk bias in our portfolios.
  • Markets are already discounting quite some bad news and may be prone for a rebound once global infections start to recede.
  • That said, a global pandemics can no longer be ruled out. Amid very high uncertainties about further contagion and the economic fallout, we reduce our tactical equity exposure to neutral.
  • As expected IG Credit has been resilient, with the fall in risk-free rates exceeding the widening in OAS spreads. We keep but reduce our overweight, with a preference for non-financials on continued support from the ECB’s asset purchase program.

Download the full publication below



According to the World Health Organization, there are 18 candidate vaccines in clinical evaluation globally. The most advanced one, which is already in phase 3, is being developed by the University of Oxford and AstraZeneca.
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.
Market Compass July 2020
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.