CENTRAL & ALTERNATIVE SCENARIOS
Significant progress in managing the pandemic, massive fiscal impulse in the US, and boosters in the RoW amidst accommodative monetary policies. All these call for a rebalancing of the probabilities assigned to our scenarios. We are raising the probability of our upside case from 10% to 20% and lowering the probability of our downside scenario from 15% to 10%. We have lowered the probability of our central scenario, which assumes improving growth and a contained inflation trajectory, from 75% to 70%. In this scenario, equities outperform on the back of abundant liquidity and improving fundamentals, while higher US bond yields and slow vaccine rollout in the EU pose tangible risks.