04 APR 2022
Eurozone printed record high inflation, urging the ECB to hike policy rates while growth prospects likely to deteriorate amid significant macro uncertainties (war, commodity, COVID); we continue to favour high quality defensive factor and position at the lower end of the beta spectrum but recommend hybrid structures
US job market continues to run hot; rate hikes and QT are more or less priced in now and growth will decide the valuation of long duration assets going forward; we see decreasing asset correlation and alpha opportunity through credit selection
Credit spreads printed another week of moderate gains and demand for high quality papers remains high; implied vol back to pre-invasion level and implied correlation finally reached the inflection point, an important measure for systemic risk perception
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