House View Q4 2025: Active and vigilant

• We favour a long duration bias in select markets due to downside risks to growth. We anticipate further yield curve steepening in key markets, such as the US. Globalised interest rate exposure is key given divergent paths in central bank policy.
• We think peripheral euro rates markets (such as Spain) are preferable to US Treasuries. We are cautious on France, where political and fiscal risks are rising.
• Consider US Treasury Inflation-Protected Securities (TIPS) as markets may be underpricing US inflation risks.
• In credit, we prefer high-quality investment grade issuers to high yield, with a focus on non-cyclicals and bank senior debt.
• Emerging market debt benefits from attractive carry and US dollar weakness, especially local currency bond markets such as Brazil, South Africa and Peru. In Asian credit, we continue to like carry in high yield.
• We are bearish on the US dollar given slowing US growth, rate cutting and growing risks to Federal Reserve independence. We favour FX longs in the euro and Korean won versus the US dollar. We also favour shorts in the British pound versus the Norwegian krone, Australian dollar and Chinese renminbi.

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.

• On a cross-asset perspective, we prefer equities over bonds, and bonds over cash. We think equities can maintain their recent momentum in a broadly risk-on environment, even though fundamentals have weakened. But although we are long on equities, we are also active users of option strategies to profit from swings in volatility.
• Emerging markets are our favoured equity markets, aided by a weak dollar, improved company earnings, an underallocation by many investors and strong price momentum.
• Our outlook on sovereign fixed income remains largely neutral, although we continue to like steepeners. We still prefer the euro zone to the US due to soft inflation data and safe-haven flows, but we are cautious on France, given the political upheaval.
• Emerging market debt is becoming a longer-term favourite thanks to conservative fiscal and monetary policies.
• As the US dollar’s status as the global reserve currency is tested, gold is emerging as the preeminent safe haven and we continue to view it as the ultimate diversifier. We hold a long-term negative view on the US dollar and we are positioning for further falls in the short term.

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.