House View Q4 2026: Renewed momentum

Asset class convictions: fixed income

• We expect the yield curve to steepen in the US, Germany and Australia. US Treasury Inflation-Protected Securities (TIPS) should outperform given ongoing upward pressure on energy prices.
• At the short end of the curve, German Bunds may offer better value than US Treasuries. At the long end, UK Gilts look attractive relative to other major bond markets. With yields at multi-year highs, we believe investors are well compensated for the fiscal risks.
• In emerging markets, we prefer bonds issued by oil exporters over importers. We continue to like Brazilian and Hungarian local bonds despite strong year-to-date performance.
• Against a broadly neutral outlook for the US dollar, we prefer currency pairs that are less dependent on the direction of the US dollar. We favour pro-cyclical and high yielding currencies, financing these positions through selective low-yielding currencies.
• We continue to see carry as the key driver of credit returns. We are constructive on financials and consumer non cyclicals, cautious on cyclical consumer names, and increasingly positive on selective AI hyperscalers, where recent spread widening has improved valuations.

Asset class convictions: multi asset

• We are overweight equities, with our strongest conviction in emerging markets, then Japan, US equities and Europe. This reflects robust earnings growth, positive revisions and continued AI-related capex. Robotics, biotech and gold miners offer attractive thematic opportunities.
• We are neutral to cautious on developed market government bonds due to sticky core inflation, fiscal concerns, central bank independence questions and priced in rate hikes. We prefer European government bonds but remain cautious on France given election risk.
• We see value in emerging market bonds, particularly where real yields are high and fiscal conditions favourable. Energy exporting emerging markets are particularly attractive. Our credit stance is broadly neutral, preferring higher-quality investment-grade exposure.
• Our currency outlook is neutral, with no strong directional views in the short term, while in the medium to long term we expect the US dollar to weaken versus G7 currencies.
• Investor demand, fiscal concerns and questions over central bank independence keep us constructive on gold. We also favour broader commodities, supported by supply constraints, refinery disruptions and tight energy markets.

The statements contained herein may include statements of future expectations and other forward-looking statements that are based on management's current views and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in such statements. We assume no obligation to update any forward-looking statement.