Tricky last mile(s)

In breve

Solid US growth, a decent earnings season and softer inflation measures are keeping global risk sentiment underpinned, with equities advancing in July. Yet the exceptional resilience of the US economy raises questions about whether inflation can quickly return to target.

Highlights:

 

  • Fresh US soft landing hopes have kept risk appetite underpinned, with central banks approaching peak rates and US disinflation on track.
  • Yet we sense rising market complacency. The last mile(s) towards inflation targets may indeed prove the trickiest. Either the US economy finally slows, or the Fed will need to bite further. The expansive US fiscal policy makes the job harder.
  • With valuations stretched and investors having re-built risk positions, a setback seems likely. We keep  prudent underweights in Equities and HY Credit, but like the carry in IG Credit and EM debt.
  • Yields are geared to the downside, if only moderately so. USD weakness is unfinished, but we tactically turn more prudent on EUR/USD.  
     

Read the full publication below

Tricky last miles
Picture

© Generali Investments, tutti i diritti riservati. Questo sito web è fornito da Generali Investments Holding S.p.A. in qualità di holding delle principali società di gestione del risparmio del Gruppo Generali che detengono, direttamente o indirettamente, la maggioranza delle partecipazioni nelle società sotto elencate (di seguito, congiuntamente, "Generali Investments"). Questo sito web può contenere informazioni relative all'attività delle seguenti società: Generali Asset Management S.p.A. Società di gestione del risparmio, Infranity, Sycomore Asset Management, Aperture Investors LLC (inclusa Aperture Investors UK Ltd), Plenisfer Investments S.p.A. Società di gestione del risparmio, Lumyna Investments Limited, Sosteneo S. p.A. Società di gestione del risparmio, Generali Real Estate S.p.A. Società di gestione del risparmio, Conning* e tra le sue controllate Global Evolution Asset Management A/S - incluse Global Evolution USA, LLC e Global Evolution Fund Management Singapore Pte. Ltd - Octagon Credit Investors, LLC, Pearlmark Real Estate, LLC e Generali Investments CEE. *Comprende Conning, Inc., Conning Asset Management Limited, Conning Asia Pacific Limited, Conning Investment Products, Inc. e Goodwin Capital Advisers, Inc. (collettivamente, "Conning").