At the end of 2018, we called for political volatility but no recession in 2019. As markets increasingly priced in recession risks in Europe and particularly in credit, we pointed out value in the sector – although we were too early in positioning ourselves.
Today, markets are rebounding and some recession fears are fading. Central banks have blinked, moderating their hawkish stance. Will this be a dovish slowdown with above-trend growth, and what are the positive and negative risks?