INVESTMENT VIEW Q4: THE NEW AGE OF FINANCIAL REPRESSION

Highlights:

• Given the surge in government and corporate debt, policy will inevitably focus on making this load sustainable: finan-cial repression, spearheaded by central banks, is set to reach a whole new level.
• Investors will need to navigate many icebergs this autumn: Covid uncertainties, a hard (or semi-hard) Brexit, the US elections and the risk associated to the crowding of positions (Growth stocks). So our positive risk bias is cautious.
• Still, investors need to start looking beyond the Covid crisis. The economic recovery is set to continue, and supports a shift towards more cyclical assets, such as emerging currencies and equities. The USD may pause just now, but is in a structurally bearish trend.
• Our largest overweight remains in Credit, where we recommend to go down the rating scale but not too much (BB).

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