MarketScope
Markets have a breather
Fundamental factors will have to drive a further upward trend on the markets. We think it is too soon to reduce our risk exposure substantially.
Signals still at green
We maintain our risk-on positioning. The global economy is recovering and investor confidence is growing. We are seeing a shift from a liquidity-driven market to one driven by fundamentals.
Risk-on rally continues
The liquidity operations by the ECB, improving economic data and the defensive positioning of investors at the end of last year are the main causes of the rally in risky assets this year.
Market outlook is turning more positive
Partly due to the liquidity operations of the ECB, the euro stress abated somewhat. Measures to stimulate the (domestic) economy are however also necessary for the Eurozone to grow out of the crisis.
Eurozone lacks a strategy for growth
We remain convinced that policymakers will ultimately take the correct steps to solve the euro crisis, possibly as a forced response to periods of growing market turbulence.
Eurozone uncertainty persists
Political rather than economic events have been the dominant factor on the financial markets for the past few months. This means that political uncertainty will place further pressure on the economic outlook.
Future looking a bit brighter for debt crisis
In the wake of a very poor third quarter, the mood on the financial markets has improved slightly over the past few weeks. The main reason is that there are slightly higher hopes of a structural solution to the euro crisis.
Debt concerns continue to dent sentiment
The growth outlook for the global economy is very uncertain. The risk of a recession has increased to 40%, partly due to the negative sentiment on the financial markets and declining household and business confidence.
About EMD Strategy & Outlook Q2