Economic momentum on the rise

Videos, Insights, CIO Update, Geopolitics
03.05.2021 de Dan Scott Temps de lecture: 2 minute(s)

Our macro view as of May 2021

Despite rising new infections, the economy appears to be recovering. Check out here whether the optimistic forecasts from our Investment Outlook 2021 remain confirmed.


How we position ourselves strategically:
The monthly CIO Update analyzes the current market environment and reveals the background. It is presented by Frank Häusler, our Chief Strategist, and Sandrine Perret, Senior Economist.

  

Setbacks amid economic recovery phase

Although the number of new global corona infections and deaths continues to grow, the economy appears to be on the path of recovery. However, we now observe two diverging trends: In the industrialized countries, economic momentum continues to accelerate, while in the emerging markets it seems to have already peaked.

Looking at the US, we expect rising consumer price inflation to continue in Q2, when inflation could reach an “overshooting” local peak. Currently, we assess this as a temporary phenomenon, which should decelerate by the end of the year. As a result, the U.S. central bank is likely to maintain its expansionary monetary policy; and tapering will only be widely debated in the second half of 2021.

Despite the increasingly positive signals, the three main risks that have accompanied us since the beginning of the year remain.

  

3 main risks – 3 possible recipes for investors


The following three recipes for risk hedging are conceivable in the current macroeconomic environment:

  • Risk 1: Extended lockdowns due to new mutations and globally increasing infection numbers. Possible risk hedge: for example, US government bonds.
  • Risk 2: Stronger second-round effects if the aid packages are not sufficiently large. Possible risk hedge: for example, government bonds.
  • Risk 3: Overheating of the economy, leading to the expansionary monetary policies being curtailed more quickly than expected. Possible risk hedge: for example, investments in real assets.

  

  

 

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