Market Compass July 2022

In Short

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.
Market Compass

Highlights:

  • Central banks are on a mission to fight inflation – whatever it takes, even a recession. The financial mood will remain gloomy this summer as economic data deteriorates while central banks walk their hawkish talk.
  • We expect the Fed to turn less aggressive this autumn, as it faces a deterioration of the economy and, eventually, employment data. Inflation headlines will also cool off by then.
  • The ECB’s political and legal capacity to reallocate its huge balance sheet to fight fragmentation will be put to test.
  • We confirm our view, with an underweight in equities and an overweight in high-quality credit. Increase cash over summer, whilst reducing the shorts in core Govies.

 

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Market Compass July 2022
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