Market Compass September 2024

Highlights:

• Central banks are getting more confident about moving closer to victory over inflation. With risks to growth from tight policies rising, markets have boosted hopes of fast rate cuts into autumn.
• This may be prone to a partial reversal. After too much inflation pessimism in H1, markets now risk rushing into oversized hopes of fast policy easing amid high disinflation optimism and cyclical worries.
• While continued disinflation and prospective rate cuts keep yields geared to the downside medium term, we cut our recommendation for long duration exposure for now.
• Global growth has become bumpier, but we deem the moderate expansion trend still intact and US recession risks low. This is conducive to a prudent overweight in risk assets. 

Download the full publication below