Rising inflationary pressures

We expect the Fed will hike rates in June and one or two times in the second half of 2018. However, a temporary move above 2% in the core PCE deflator is unlikely to trigger a switch to a more aggressive pace of rate hikes.

Moderately overweight equities

Equity markets are currently locked in a sideways holding pattern. It is possible that when markets make up their mind, the resulting move could be powerful.

Catalysts boost Chinese markets

US-China trade talks are likely to be protracted and no slowdown worries yet for the Chinese economy.

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