Back To Goldilocks?
Markets have breathed a sigh of relief after last Friday’s payrolls figures. Not only did the headline number surprise to the upside, but the upward revisions to previous months’ numbers have alleviated fears that any ‘soft patch’ arrived early this year. Nevertheless, the price outlook is challenging enough to warrant the Fed sticking to its current framework and any slowing of balance sheet expansion will have to wait until next year. After the uncertainty of April, it suddenly appears that markets could enter May and the summer months in a ‘goldilocks environment’. As a result, the existing ‘risk on’ pain trades could well extend for some time.
Click here to read the full report: UBS