Market Compass March 2023

Highlights:

• Central banks’ difficult battle against stubborn inflation is getting even harder
• February dashed hopes that policy makers may quickly tame inflation. We now expect even higher peak rates.
• The recent rebound in long-term real rates makes Equity valuations even more stretched. Healthier than expected growth in Europe and China’s reopening bounce are only a partial relief.
• We continue to favour a (trimmed) underweight in Equity and High Yield, while seeing value (mostly in the carry) in IG Credit.

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