The growth outlook for 2018 is robust, but two-sided inflation risks have emerged. We overweight equity, with marginally less conviction, downgrade investment grade credit and close our cash underweight. Our portfolio tilt is moderately pro-risk.
Expecting strong growth and contained inflation over the near term, we see a gradual path to central bank normalization. If inflation picks up, our outlook could change. Among our best ideas: European bank capital, U.S. high yield, securitized credit.
This paper, written by Ian Hui, addresses MSCI's announcement of delaying the inclusion of China A shares in their benchmark Emerging Markets Index and discusses the relevant implications.
Chief Market Strategist Stephanie Flanders discusses Britain's place in the EU and the pre-referendum landscape and despite of how a vote in favor of remaining in the European Union is probable, a “no” vote in the coming UK referendum is a distinct possibility and is something investors should be prepared for.
And what if Britain does votes to leave? Short-term economic and market impact and longer-term consequences are also discussed. But the transition to a new set of arrangements would be messy and potentially very costly, not just for the UK but also its closest trading partners.
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