Market Compass September 2021
- Toppish data, rising Covid worries and China’s regulatory clampdown are weighing on the outlook.
- Yet the recovery will not run off the rails and policy makers will tread cautiously in removing accommodation.
- Low real yields and solid expansion still leave risky assets with legs, while rates will creep higher only sluggishly.
- We maintain a prudent pro-risk bias, but acknowledge a higher risk of setbacks in the more mature phase of the cycle.