Highlights:

• Progress on disinflation and easing fears of escalation in the Middle East have fuelled a broad-based market rally in November.
• Amid the siren calls from lower yields, however, mind the still bleak growth outlook. We expect the lagged fallout from the Fed’s tightening to send the US into stagnation, while Europe will recover only sluggishly from a moderate recession.
• The decline in yields still has legs, albeit more moderately so from here. With hopes of an early Fed pivot already advanced, central banks will need to keep financial conditions from easing too fast.
• Risk assets discount quite some optimism of a soft landing. Going forward, cyclical concerns will overshadow more strongly the disinflationary relief. 
• We retain some caution on Equities and HY Credit near term, favouring IG Credit and longer dated Govies. Yet amid a somewhat brighter backdrop for risk assets, we trim the size of active positions.

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