The war between Russia and Ukraine will soon enter a third week. In our latest Focus, we consider four scenarios to examine the potential implications for the global economy and financial markets. These scenarios have different geopolitical narratives. In the first scenario (medium to high probability), a Russian military victory leads to an unstable Ukraine and to Cold War II. The second scenario (medium to high probability) involves a negotiated deal between Russia and Ukraine. The third scenario (medium to low probability) is the scariest one: a Russia- NATO armed conflict including the use of tactical nuclear weapons. The fourth scenario (a coup against Putin) has the lowest probability to take place but still has merit. Below we detail the consequences of each scenario on growth, inflation, monetary policy as well as on the performance of the main asset classes.

China and Russia aim to weaken the US hegemony and the reign of the greenback. The tragic invasion of Ukraine could be seen as one step in a long-term process. In our latest Focus, we reflect on the profound changes at play, and the pressures the long-standing US supremacy is under. Its dollar is being questioned as an absolute reference for global trade, and flexing its military muscles seems to be less intimidating than it once was. In a world vastly different than the petrodollar world economy Richard Nixon helped shape, Chinese President Xi will play a key role in the new global balance of power.

SPECIAL ASSET ALLOCATION INSIGHTS The Russia-Ukraine conflict has pushed geopolitical risk to a very high level and is having a meaningful impact on global financial markets today through: 1. the rise of equity risk premium, 2. tighter financial conditions and 3. higher inflation ahead due to rising energy costs. We held an extraordinary investment strategy meeting this morning and would like to share our key takeaways below.

The traditional diversified equity and bond portfolio has enjoyed years of exceptional performance. However, the current market environment of low interest rates and high volatility invites investors to consider new portfolio management approaches. In our latest Focus note, Luc Filip, our Head of Discretionary Portfolio Management walks us through the inner workings of our new portfolio management model, at a time when the diversification properties of a bond & equities portfolio are much less effective than in the past.

With inflation on the rise, the era of negative bond yields seems to be coming to an end. Will this new paradigm curb risk-taking and lead to asset class rotation? In this edition of Focus we explore the consequences that rising interest rates will have on investment decisions. After decades of low and negative interest rates, the frozen global economy is showing the first signs of thawing with bond yields making their way back into positive territory. Will this drive capital away from riskier investments?

It has been a rough start to 2022 for risk assets as expectations of more rapid monetary policy tightening and inflation concerns pushed equities and bonds to sell-off simultaneously. The biggest macroeconomic development so far in 2022 is undoubtedly the hawkish pivot by both the US Federal Reserve and the European Central Bank in response to persistent inflation. But after a hectic January, and despite widening credit and European periphery spreads, global stocks saw some sense of calm return last week with narrowed down intraday swings.

The stock prices of the web giants (Alphabet, Facebook, Netflix, etc.) used to move in tandem. But for several months now, they have been diverging. Is this the end of big tech stocks being in synch, or is it an aberration?

Like the FED last week, the ECB’s official statement met market expectations but the press conference suprised.

After a strong 2021, it has been a rough start to 2022 for risk assets. For many years, stock and bond returns have consistently moved in opposite directions. But in January expectations of more rapid monetary policy tightening and inflation concerns pushed equities and bonds to sell-off simultaneously. Here are 10 stories to remember from an eventful month.

Anti-fragility describes a category of things that not only gain from chaos but may need it to survive and flourish. Among financial assets, CGBs (Chinese Government Bonds) seem to fit this concept.