Equities
The US fiscal outlook is more unappetizing than it was before the pandemic, but we are not convinced that a difficult day of reckoning awaits. A Treasury market crisis is conceivable, but it is far from inevitable.
The current Fed easing cycle will likely be a “buy the rumor, sell the news” phenomenon. The basis is our expectation that the US economy is heading into a rough landing. The primary driver of EM currencies is not US interest rates but the global manufacturing cycle.
The unwind of yen carry trades caused violent tremors across the globe. Was this shock a one-off event or the prelude to more troubles?
The market backdrop changed a lot between the preparation and the publication of our equity downgrade report. We publish this companion Insight to help investors navigate the new environment.
