Investment Office

Concise overview of capital markets

Outlook

Economics

• Economic slowdown: Europe should be prepared for a gruelling winter.
• Fresh momentum in the spring if the trade dispute eases and a hard Brexit is avoided.
• The US Federal Reserve will soon pause on raising interest rates.

Bonds

• Government bonds can hardly be expected to yield positive income in 2019.
• Still no recovery in the segment of corporate and high-yield bonds, tough start to the year expected.
• We are still keeping the duration short; we are underweighting bonds in the multi-asset portfolio.

Alternative investments / commodities

• Gold stands to benefit from the expected end of USD strength and higher physical demand in major buying countries.
• The price of oil (Brent crude) will probably stabilise due to the OPEC+ production cut and further production outages.
• Supported by low inventory levels, industrial metal prices are expected to reverse trend in the course of 2019.

Currencies

• The EUR/USD exchange rate is fluctuating around the level of 1.14; the possible Fed pause in raising interest rates is weighing down the USD, while the euro is under pressure from Italy and Brexit.
• The British pound mirrors the Brexit developments; the recent drop was caused by worries about the parliamentary vote.
• The euro/Swiss franc rate is approaching its low for the year of 1.12; the franc remains in demand as a safe haven.

Read the full report

The Berenberg Capital Markets Outlook