Investing.com — HSBC strategists, led by Max Kettner, have expressed a positive outlook for risk assets in the coming months, based on the latest dovish Consumer Price Index (CPI) and Producer Price Index (PPI) data. The team views these data as significant factors that could create a favorable environment for risk assets.
The strategists anticipate only slight drawdowns in the near future and suggest using any potential downturns as opportunities to increase risk asset exposure. They also note that current sentiment and positioning continue to indicate a buy signal.
The team also foresees potential downward pressure on supercore inflation, which they believe could be extremely supportive for both risk assets and sovereigns. If this view materializes, they would prefer growth over value in equities. They also believe that certain bond proxies, such as homebuilders, have been oversold recently.
In addition to equities, the strategists also predict a potential recovery for emerging market (EM) local debt. They continue to view gold as a key overweight, particularly from a hedging perspective, although they note that the recent spike in oil prices appears excessive.
The HSBC team also anticipates potential slight negative surprises in U.S. activity data and higher consensus growth expectations in the first quarter due to residual seasonality.
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