Market Compass February 2025

Highlights:

• Trump’s MAGA agenda keeps markets on edge. A universal tariff does not seem on the cards, but relief is limited as uncertainty remains high.
• Political uncertainty and volatility will remain high, but our core assumption remains that Republicans will want to avoid creating another large inflation shock. We maintain a moderate pro-risk tilt amid a still conducive backdrop of solid global growth, further rate cuts and receding inflation.
• Our preference is for IG Credit and to a lesser extent for Equities, at the expense of Cash. We increased duration exposure in the Euro Area as the drag from lower inflation, economic stagnation and further ECB rate cuts will partially unwind the recent rise in yields.

Download the full publication below