V-shaped risk rally

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Multi Asset Monthly

Our base-case macroeconomic scenario for this year assumes that global growth will improve from the current soft patch on the back of a reduction in trade risks and other political risks. Additionally, central bank policy has turned more dovish; in particular, the Fed has signalled it may explicitly aim for a moderate inflation overshoot. We anticipate more divergence in emerging markets, as the global drivers fade and make room for more idiosyncratic factors (policy divergence, reform stories, demand adjustment, less orthodox policies). We expect China to continue stimulating its domestic economy. Monetary policy normalization has paused for the time being.