The much discussed so-called rewiring of the global economy and financial markets – due to the changing and evolving macroeconomic and market environment – could well require caution from forecasters, policymakers and investors.
But the US approach to trade and international relations could also signal structural changes that will persist beyond the current administration that should be observed.
And while unpredictable policymaking sets an unfavourable backdrop for the economy and markets, French asset manager Amundi also see opportunities linked to different asset prices.
This is because despite high uncertainty and a weak growth outlook, major economies and business have proven resilient so far.
For Vincent Mortier, group CIO of Amundi, the global picture remains positive for credit markets and importantly, he does not foresee a corporate profit recession.
“Government bond markets are rattled by the threat of higher debt and rising inflation fears, keeping volatility high,” he said. “Investors are likely to demand greater compensation for long-dated bonds, making yields appealing.”
The name of the game therefore, “will be diversifying away from the US and into European and emerging market bonds,” noted Mortier.
In addition, Monica Defend, head of Amundi Investment Institute, added: “Despite unpredictable policymaking, business resilience, and new rerouting trends, the expected rate cuts from central banks will create opportunities in global equities.”
Therefore Defend noted attractive sectors for investors.
“We are focusing on themes such as European defence spending, US deregulation, corporate governance reform in Japan, and the ‘Make in India’ initiative,” she said.
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