Ryan Paterson

We remain positive on equities as recession risks appear to have diminished, despite ongoing economic uncertainty. Corporate behavior remains stable, and downside risks are more limited. On duration, we hold a neutral stance: although yields have risen and valuations improved, concerns persist around US debt levels and inflation, and we expect less policy easing from the Federal Reserve than markets currently anticipate. Credit is also rated neutral this month—valuations are stretched, but fundamentals are solid, with reduced cyclical risks and subdued M&A activity.

Commodities remain neutral; we favor gold for diversification and stay negative on energy due to strong supply and potential demand weakness. Lastly, we maintain a negative view on the US dollar, favoring the euro, local EM debt, and now the Japanese yen, as investors seek diversification amid US policy unpredictability.

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