There are three main macro factors for markets – the business cycle, the liquidity cycle, and the political cycle.

While we believe that optimism regarding an evolving and eventual trade deal between the U.S. and China is well-placed, we would caution investors against growing complacent about trade policy risk more broadly.

The overall tone at the mid-April meetings of the International Monetary Fund and the World Bank Group in Washington, DC, was optimistic, albeit mindful of the differentiated political and idiosyncratic risks across emerging markets.

Eurostat’s recent revision of the HICPxT index could have two potentially wide-reaching effects for euro area inflation-linked bonds (ILB) investors.

Even as the probability of a recession in the near-term remains low, we believe investors should look to sectors that are likely to be resilient in periods of higher volatility.