Ryan Paterson

The US have raised effective US tariff rates to their highest level since the 1930s. This policy announcement worsens the near-term growth/inflation trade-off, increasing the risks to both economic activity and price stability in the short term. As such, we have downgraded our score on equities from positive to neutral, but have broadened regional exposures due to varying valuations.

We are neutral on government bonds, with US bonds fairly valued after recent corrections. Commodities are mixed; positive on industrial metals and gold, but neutral overall due to excess supply in energy markets. Corporate bonds have been downgraded to neutral due to tight valuations and policy uncertainty. In currencies, we have downgraded the US dollar to neutral and the Swiss franc to negative, while upgrading the euro to positive. Emerging markets local currency bonds have been upgraded to positive for diversification benefits and attractive yields.

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