We are pro-risk for 2021 and expect the pro-cyclical rotation across and within assets to continue, supported by a strong economic recovery from the COVID-19 shock. With a favourable growth/inflation mix and still elevated equity risk premia we are OW equities and UW bonds.
20 Nov 2020 | 5:46pm GMT | Research | Portfolio Strategy - Christian Mueller-Glissmann and others
While the vaccine presents tactical upside, the pandemic itself represents a structural shift. We believe commodities' streak of poor returns has reached an end in the aftermath of the Covid crisis. Of course, negative oil prices are hard to top, and it’s easy – and largely accurate – to present the 2021 commodity outlook as a V-shaped vaccine trade. What we think is key, however, is that this recovery in commodity prices will actually be the beginning of a much longer structural bull market for commodities driven by three key themes.
18 Nov 2020 | 05:57am EST | Research | Commodities - Jeffrey Currie and others
We expect credit spreads will continue to inch to their pre-pandemic levels. While the near-term growth path may prove bumpy, low macro volatility following recent positive vaccine developments, the accommodative stance of monetary policy, direct central bank interventions, and a remarkably supportive supply/demand technical backdrop should support credit risk appetite, in our view. Valuations limit long-term upside relative to the stellar performance since late March. But credit will likely deliver decent excess returns and solid Sharpe ratios in 2021.
18 Nov 2020 | 5:59PM EST | Research | Economics - Lotfi Karoui and others
We remain confident about the global economic recovery in 2021, expecting global real GDP growth of 6%. Our rates team forecast steepening yield curves and higher break-even inflation from Q2. Our commodities team emphasise that all major commodity markets are in deficit, and they expect rising prices over the next 12 months.
12 Nov 2020 | 5:53am GMT | Research | Portfolio Strategy - Peter Oppenheimer and others
We expect that a strong vaccine-led recovery in global growth will provide a large boost to cyclical assets, including commodities, cyclical equity sectors and emerging markets. However, the path may be tricky as the market balances spot growth weakness with a forward outlook that is more supportive.
10 Nov 2020 | 5:42am EST | Research | Economics - Zach Pandl and others
Our GDP forecasts are above consensus in most major economies in 2021, and everywhere in 2022. At the most basic level, we view the coronavirus recession as much more V-shaped than previous postwar cycles, which were mostly driven by financial shocks to asset markets and income.
7 Nov 2020 | 2:54pm EST | Research | Economics - Jan Hatzius and others