A LowLow Trap Calls for a Risk-Off Stance
July 19, 2016
After the UK referendum we downgraded our economic outlook, more on political uncertainties than any direct Brexit consequences. Our base scenario suggests a LowLow “trap” as the risk of political paralysis in Europe is not negligible. In the LowLow trap scenario, we believe that asset allocation should focus on effective diversification to manage possible periods of turmoil driven by rising risks to the global scenario. In our view, gold and the USD may act as hedges against these risks.