November 30, 2020

A shot in the arm

Share on facebook
Share on twitter
Share on linkedin
Share on email

In Short

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. The broad-based rally (comprising also Credit, EMs and Commodities) may seem reckless. Lockdowns in Europe may persist over the winter, while laissez-faire in the US warrants a sharply rising death toll. Daily Covid casualties exceeded 2,000 in the US even before Thanksgiving, a potential national superspreader event.
A shot in the arm
Share on facebook
Share on twitter
Share on linkedin
Share on email

Highlights:

  • 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.

Download the full publication below

 
MARKET PERSPECTIVES 12/2020 - A SHOT IN THE ARM
December 18th, 2020

Also interesting

EU flag green
July 26, 2021
Focal Point

ECB greening of the credit market to start in 2022

triple peak
July 23, 2021
Market Perspectives

Market Perspectives ǀ Overfretting about the triple peak

European-Central-Bank-in-Frankfurt_web
July 22, 2021
Market Commentary

ECB sends a dovish message as new strategy increases threshold for raising rates