Current views at a glance - September 2017
Concerns over ongoing economic strength in light of Brexit overhang and views that the tailwind from weaker sterling may be in the past.
Better economic activity with an undervalued currency and equity market.
Slightly negative due to fuller valuation alongside concerns over Trump's delivery on pre-election promises.
Better global economy is helping but the domestic economy is still disappointing.
Dollar headwinds are fading and the pick up in global trade is helpful to Asia Pacific.
Modest but synchronised global growth should be more supportive to Emerging Markets.
We remain negative on GBP and euro bonds but US Treasuries are becoming more attractive given the normalisation of yields that has taken place.
Credit spreads provide some pick-up but we prefer short-dated bonds.
Credit spreads are at a historically tight level so we would be wary of high-yield spread duration exposure.
Recent gains in inflation-linked government bonds reduce their valuation attractiveness but they are still desirable from an improving economic perspective.
Selectively, local emerging market bonds offer good interest rate and currency exposure.
Increased volatility and dispersion should provide opportunities.
Absolute: fixed income
Lower liquidity and flatter rate profiles reduce the attractiveness of many strategies.
Increased volatility across many asset classes should counter flatter rate cycles.
Post-Brexit concerns have resulted in the marking down of property, but income characteristics are still attractive.
Gold is attractive as a diversifier, portfolio insurance and as an inflation hedge.
Ongoing excess supply is likely to weigh on prices for some time.
Oil continues to be volatile as politics and supply concerns dominate the market.
Cash has defensive and opportunistic qualities in uncertain and volatile markets.
Spread - the difference in yield between a non-government and government fixed income security.
Duration - approximate percentage change in a price of a bond for a 1% change in yield.
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This document may include forward-looking statements that are based upon our current opinions, expectations and projections. We undertake no obligation to update or revise any forward-looking statements. Actual results could differ materially from those anticipated in the forward-looking statements.
All data contained within this document is sourced from Cazenove Capital unless otherwise stated.