Trade disputes are raising the downside risks to our forecast for slightly subtrend growth. We retain our mild underweight to stocks and prefer to take risk in carry assets like credit. Reflecting valuations, we downgrade duration to neutral.
The Fed halted tightening and propelled equities to their fastest recovery ever following a bear market. This decision was made despite the lowest unemployment rate in 40 years. Does that make sense? Also, a possible deal with China.
Our view over the past few quarters has been that EURUSD should be rangebound, as the cyclical outperformance of the US economy is offset by the eurozone’s relatively better balance of payments position.
Michael discusses this year’s Eye on the Market Energy paper. Topics include the unattainable objectives of the Green New Deal, an overview of the world’s de-carbonization challenges, Germany’s energy transition and Trump’s War on Science.