Geopolitical risks, inflation and hawkish central banks translate into a cautious stance on risk assets such as credit, in which, a deceleration in growth (and its impact on earnings) could create concerns over cash flows and liquidity, especially for the lower rated companies. Hence, we prefer US IG and are defensive on HY.
On the other hand, USTs are attractive at current levels, but investors should stay active and also explore select opportunities in euro area curves. In equities, we favour US over Europe and selectively like quality, value names that can sustain earnings and reward shareholders even in a downturn.
The US Congress’s August approval of the Inflation Reduction Act (IRA) came as a surprise to most observers. With the mid-term elections just months away and no majority in Congress, no one expected new legislation to be passed. Yet, the Democrats and Republicans managed to reach a compromise. We discuss below the measures announced to promote the environmental transition, which is the centrepiece of the act. Europe has much to gain from looking more closely at the modalities of the new US green industrial policy.
You can now read the full whitepaper at the link below
