Tech sell-off and bond temptation
The repricing of a more aggressive Fed stance has been brutal as the 10Y UST yield temporarily reached the 3% threshold, falling close to 2.75% recently on economic growth concerns. We think investors should move towards neutrality on duration in the US and Europe, whereas in credit, they should focus on quality and stay cautious on higher-risk segments in Europe. Hard currency EM bonds are showing attractive valuations. On the other hand, in equities, we like to play the resilience of US over Europe. Overall, investors should remain diversified and well-hedged, without increasing their risks.