- Defying the deepest global post-war recession, risk assets have continued to climb the wall of worries.
- Flattening new cases in the advanced economies and the continued policy deluge will help to keep sentiment underpinned.
- The air is getting thin, though, with US equity markets back to autumn 2019 levels. Key risks are a second wave of infections and the fast deterioration in US/China relations.
- We stick to a pro-risk tilt concentrated in the higher quality buckets of risk assets, even as cyclical assets are showing signs of life. Keep a small long duration bias given the ‘swoosh’ recovery, disinflation and continued central bank activism.