We continue with our pro-risk allocation, given strong global growth as pent-up consumer demand is unleashed in the pandemic recovery, and monetary policy remains accommodative.

We continue to see the global economy accelerate in the second half of 2021 as pandemic headwinds fade and service sector activity normalizes.

We believe positioning versus reflation went too far, with reopening and reflation of stocks and long-term bonds trading at January levels (pandemic peak). Therefore, we expect reflation trading (cyclical stocks, bond yields, reopening and reflation themes) to pick up as Delta-variant fears subside, inflation persists and economic growth/recovery continues at a rapid pace.

As a whole, we remain OW in equities (value and cyclicals) and commodities. UW in bonds. We believe long rates are on the downside of this corrective process. We continue to target levels closer to the 1.6%- 1.75% range for the 10-year treasury by the end of 2021 and with a yield curve that will start to steepen again. While China's regulatory actions and the spread of the delta variant have continued to be reflected in the underperformance of emerging assets, in our view neither variable is likely to derail the strong fundamental picture.

For more information see the attached report: Market Vision August 2021