March 2023: Unraveling Investment Trends amidst Global Uncertainty

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The month of March 2023 has been characterized by significant volatility in equities and bond markets, triggered by troubles in US and European banks, which have led to a resurgence of macroeconomic uncertainty. This situation has seen a temporary resurgence in the value of traditional safe-haven assets such as gold and the Japanese Yen. Despite the upheaval, the underlying cyclical outlook has mildly improved, given the robustness of services in the West and China's reopening.

Liquidity Issues and Banking Sector Confidence: A Swift Response

Authorities have responded promptly to address the acute lack of confidence in the banking sector and liquidity issues. The current banking sector issues are not seen as systemic, and skepticism remains about the prospects for near-term rate cuts. Investment actions taken include adding exposure to European markets and reducing duration by selling investment-grade bonds. Ample cash reserves are maintained to act opportunistically in volatile markets.

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