Following the pronounced recovery of all asset classes over the summer, financial markets are now likely to be more swayed by the discussion over the prevailing risks. The higher probability of a coronavirus “spike” following the end of the summer holidays, combined with geopolitical uncertainties such as Sino-US tensions and the approach of the US elections, could loom larger in the minds of investors. The flood of liquidity unleashed by central banks as a form of insurance against a renewed weakening of economic data remains a positive.

Over the course of time, the market focuses on various themes, depending on what is making the headlines at any particular time. One market theme that has recently receded into the background somewhat is inflation. Part of our investment strategy approach involves analysing themes that are not the current focus of attention, as these may be underestimated. One issue that could become more prominent over the next few months is the debate over inflation, particularly in the event of economic data improving. In such a scenario, the emphasis could shift from sovereign bonds more to their corporate counterparts.

The innovative blockchain technology (“distributed ledger technology”, DLT) and the associated expectations have already attracted a considerable amount of attention. For both private and institutional investors, however, it is still not easy to profit from the numerous possibilities of this young technology. In a market environment that remains fairly opaque, investors need to find their way around the many different providers and specialists while also overcoming the technical hurdles that exist in connection with blockchain technology. The specialists on our Crypto Desk are looking to shine a light in the darkness with this publication.