Short Term Resilience, Waiting for Elections and Fiscal Policy
October 19, 2016
The fall electoral season will be, in our view, a source for market volatility. Short term risks to the outlook have eased somewhat, thanks to the stabilization of commodity price and resilience to Brexit, but for a more benign medium term outlook will be essential a more decisive fiscal response. We believe that the search for yield is set to continue favouring the credit market and high yield bonds. We are positive on EM Equities - India and China - as we believe the structural transition is progressing well.