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Asset Allocation

We think bond yields will fall sharply until next year, while equities struggle and the US dollar continues to strengthen.

While we think the sell-off in government bond markets is probably almost over, with central banks still hawkish we doubt yields will fall over the rest of this year. Meanwhile, the deteriorating economic backdrop will, in our view, keep “risky” assets such as equities under pressure and fuel some safe-haven demand for the US dollar. We don’t expect risky assets to rally until mid-2023 or so.

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