Executive summary
- Fullerton’s Macro Regime Indicator has shifted to “Sentiment Driven” which is positive for returns from global risk assets. Risk taking appetite has improved.
- We maintain our positive view on Developed Market equities (especially the US), global and Asia bonds, and corporate credit. We are negative on China and Asia ex-Japan equities.
- DM equities are performing strongly, driven by the US, as growth expectations have been revised-up and as earnings grind higher.
- In harmony with our “3G” forces of a great decoupling and reset, the US Fed has signalled higher interest rates for longer.
- Key indicators remain consistent with our view of the USD fluctuating around a downward trend.
- We are negative on oil (due to China demand weakness), but still positive on gold (geopolitical risks remain elevated).