The return of volatility due to rising US political risks could open up opportunities. Fundamentals such as earnings and data are strong, especially in the Euro area and Asia.
Asia ex-Japan equities have been stable amid the volatility, underscoring our strong preference for the market. The S&P500 faces a technical support 2% below current levels.
We expect Treasury yields to return to the 2.30-2.65% range once political risks abate. This means we would await better entry points for rate-sensitive USD bonds. Continue reading Market Update: The return of volatility