- The outstanding risk rally in November may appear reckless amid resurgent Covid cases, persistent risks of a hard Brexit and a (likely) split new US government taking office in January.
- Yet markets are right in pricing recent vaccine news as a game changer for the pandemic while central banks remain committed to extended stimulus.
- We thus slightly extend our pro-risk tilt, with a sizeable overweight in Credit and (more prudently) in Equities. A weakening US dollar favours exposure to EMs. Cash and Core Government Bonds remain unattractive.