Dr. Nannette Hechler-Fayd’herbe and Dr. Luca Bindelli, the bank’s lead strategists, maintain an overweight stance on global equities. They argue that emerging markets offer superior earnings growth and more attractive valuations compared to developed regions. While the firm remains positive on the technology sector, it is shifting toward financials and cyclicals as it anticipates a broadening of market performance.
Fixed income strategy has also seen a tactical adjustment. The bank has raised its exposure to global government bonds to neutral, specifically targeting UK gilts and Australian bonds to lock in high yields as inflationary pressures recede. Regarding currencies, the firm expects the US dollar to remain resilient, leading to a neutral stance against lower-yielding currencies like the euro and the Swiss franc. The strategists caution, however, that investors must remain vigilant, as upcoming US midterm elections, potential policy shocks, and restrictive Federal Reserve actions could trigger renewed volatility.
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