Much of the looming growth deterioration seems already priced in fixed income. With the peak in inflation still to come and further key rate hikes still in the offing, we expect yields to trend moderately upwards again in the weeks to come.
In Europe, inflation continued to worsen, hitting an annualised 10.1% in the UK in July, or above expectations, with underlying inflation running at more than 6%.
Sector diversification, de-correlation between stock markets, and the export orientation of
Nordic companies, suggest a scenario of lower volatility that favours the Nordic equity
Demand for consumer goods also starts to look shakier with the erosion of purchasing power from consumers and the build-up in inventories (flagged by many businesses) pointing towards the demand peak being well behind us.