Global Fixed Income & Currency Strategy

March 14, 2022

The Russia/Ukraine conflict is unleashing a stagflationary impulse on the world economy. This could be followed by a recession as oil prices soar and central banks tighten policy.

Stay overweight duration in fixed income portfolios. Inflation is a lagging indicator and investors should place more weight on slowing growth.

In currencies, the Ukrainian crisis is bearish for the euro. Commodity sensitive currencies and the Swiss franc are the outperformers.

Finally, the headwinds for gold are fading. The equity risk premium is rising, real yields have reversed lower, and geopolitical risks are soaring.