Multi Asset Themes
A LowLow Trap Calls for a Risk-Off Stance
After the UK referendum we downgraded our economic outlook, more on political uncertainties than any direct Brexit consequences. Our base scenario suggests a LowLow “trap” as the risk of political paralysis in Europe is not negligible. In the LowLow trap scenario, we believe that asset allocation should focus on effective diversification to manage possible periods of turmoil driven by rising risks to the global scenario. In our view, gold and the USD may act as hedges against these risks.
Central Banks in Action
The Bank of England surprised the market delivering a larger than expected stimulus package. After the Brexit vote, Central Bank actions are even more pertinent in our view as they become essential to preserve financial market stability amid concerns regarding global growth and lack of reform momentum. We believe that current monetary policy stances support a positive bias towards European corporate bonds.
UniCredit, Banco Santander and Sherbrooke Acquisition Corp end Pioneer Santander AM merger talks