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- Modus operandi for stocks: buy dips – We believe the current environment is conducive to buying dips, but also selling excessive rallies. Broadly speaking, we expect equities to trade within a volatile, slightly upward tilted range. We bought recent dips in developed market stocks.
- Search for yield makes carry assets attractive – A further compression in real rates should support high-yielding assets. We remain long emerging market hard currency debt and are looking for tactical entry points in other carry/high-yield assets.
- Central banks spur reflation hopes – We expect reflation hopes on the back of recent central bank action to drive US inflation break-evens higher, at least in the short term.
- Building robust portfolios – We are monitoring several risks that could destabilise the current status quo. As such, we also still believe that building robust portfolios is absolutely key and we hold several trades with asymmetries/hedges.