Beyond the evident slowdown in the global economy in recent months, as a result of the resurgence of Covid-19, we believe that this should be adequately offset by greater policy support, especially in China, which would shift from financial repression to a more accommodative stance, either by easing monetary policy or through some form of more targeted fiscal stimulus, while the Federal Reserve is likely to have to delay any announcement of a reduction in asset purchases until December, which remains our base case scenario.

Recent debate has focused on possible policy adjustments by major central banks, particularly the Fed. In this regard, we believe that the pace of policy changes will be gradual enough not to derail the economic recovery or the market rally, while the differences between the more aggressive and more moderate central banks will create opportunities.

We expect major central banks to continue supporting growth and keep rates low for longer. This is positive for equity markets, particularly for cyclical and value areas of the market.

For further information, please refer to the attached report Market Outlook September 2021.