Darren Ripton

As global growth continues to remain resilient in the face of higher rates, we still see central banks taking a cautious but proactive approach to lowering rates this year.

However, with Donald Trump re-entering the White House, we could see inflation becoming more persistent as both his economic and immigration policies take shape.

Whilst the US market continues to be out of favour, developments in Europe and in particular, Germany, look set to deliver constitutional reform to unlock higher defence spending and public investment. We think these measures will boost GDP growth by 0.5-1.0% over the next few years.

Due to this, we have recently rotated equity risk by closing our infrastructure overweight to fund a neutral European Equity position.

The recent rise in credit spreads has also provided an opportunity to close our high yield bond underweight, a move funded by reducing our overweight to short-dated government bonds.

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