I guess the assumption on where the US economy goes well we'll tell you generally what asset allocation you should employ at
this point. So what is your assumption on the US economy over the next six months.
Our assumption is that we will have a lot of volatility still going on. And you know that there's so many moving parts. We're
just getting informed from this earnings season as well as to how companies are setting up. So we have also acknowledged that
this risk of recession has gone up quite a lot. And we are now forecasting a mild recession in the first quarter and the first
two quarters of next year. So do you think in terms of what markets are positioning around
that that recession trade is it fully priced in. And do you think stocks can continue to fall even if we don't see a
recession across developed markets. Yeah I think on the one hand I believe we come a long way to
have growth risk inflation risk stagflation risk and then pricing for recession risk. I was a little bit concerned as to
whether the analyst estimates for this earnings season are quite optimistic and they think we have just kicked it off last week.
And as we see and also last night companies are using this earnings season to give us more
information as to how challenging they see the environment coming up. And was probably these analyst estimates are still a
little bit too optimistic and there's more room for downside volatility.
OK so within the equity markets generally what what looks better than others. And I'd even throw Europe in there because there's
this looming energy risk that's still almost binary there. Yes. Well this week will be a very telling one for Europe and I
think it's extremely challenging to have two things at the same day. It's the ECB decision to raise rates to give us more
information on the anti fragmentation tool. And at the same day we get more clarity as to whether the Nord Stream pipeline will
go back to full capacity some capacity back at all. So that's a very challenging outlook for Europe. And I think that is also
what's weighing down markets there. Just to clarify in terms of our expectations and whether an What'd You Miss? coming back on
we think for two reasons that Russia will continue to deliver gas. Number one that is because all the leverage would be going
away. If you just switch off the gas pipeline then there's only one way to go on with that is up. And then at the same time once
you switch off you will have a price increase that if you don't deliver any gas you will be not benefiting of these price
increases. And these are revenues that Russia won for gold. So that's that's the way we look at Europe at the moment.
Is that why you're also sort of reducing your exposure to commodities now as well and perhaps also a sign that inflation
is starting to peak. Exactly. So commodities of course is challenged on the one hand
you have these price increases that are still there a price that are still much supported
also by the inflationary picture. But as we go in price recession you also will see that the commodities complex is
coming under pressure. What I think is more interesting in terms of allocating your money right now and you touched upon it
earlier is the Asian equities or the Asian markets precis. You've heard me going on and on about being cautiously
optimistic looking especially into the second half of the year in regards to China and Asia ex Japan on the back of the China
reopening story. So we maintain that view. And nothing you've heard in recent weeks whether that's the weak
economy or what's brewing in the mortgage part of the property market not to get into the details there. Nothing you've heard
so far derails that view that you think China will outperform. We have always been quite
cautious on the property side of the property segment of the market. I think last year's experiences have taught us that
there will be much you know there is a looming more news that there is also a consolidation that needs to go on in the market.
And it's just been reaffirmed right now. So. So you know the positive part about it is that the mortgages
are under repaid because the consumer doesn't have the money. Mortgages aren't repaid because they are projects that were
stalling and that didn't get completed. And that is something that the government has already shown resolve to tackle you know
with the mortgage holidays. Maybe they will be going back buying land or inject liquidity and other ways to help these
developments to go forward. So in that respect it's just very interesting to see how the market is now refocused on these
varies. I think it's not just the mortgage or the property market is also Covid that has now gotten back a lot of attention
which tells us it will be quite challenging for the regional markets to overcome the overall bad risk sentiment that we have
and the global headwinds that are keeping the markets kind of in this risk of sentiment.