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Investment Monthly - July 2019

Dovish central banks
01 July 2019
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    key takeaways:

    • The market is now pricing a lower-for-even-longer rate scenario. But even if this scenario materialises, relative valuations continue to suggest a preference for equities versus bonds
    • At this point, we think exposure to US cash (unhedged) and risky assets (global equities, local-currency emerging market debt) makes sense
    • Corporate fundamentals are beginning to come under pressure - risks in developed markets are increasing and profitability in Asia is under pressure. We need to monitor developments closely
    • Last month, we said global high-yield was "at risk" of a view change to underweight. However, improved valuations mean we remain neutral in this asset class