The economy is slowing and inflation will not return to central bank targets immediately. That's why we prefer value stocks, emerging markets and commodity producers

The fundamental cause of the still significantly elevated inflation is the unprecedented monetary and fiscal stimulus of the pandemic economy (2020-2021) from a global perspective. Their effects are still being felt in the economy and markets today.

The momentum of the global economy has been slowing in recent months. This is particularly evident in the euro area, specifically in Germany.

Inflation across the world economy remains strongly elevated. It is unlikely to return to the 2% inflation target for quite some time.

Global bond markets have become substantially cheaper in recent years. However, they are still not very attractive in our view, even in the face of still strongly elevated inflation and record budget deficits in key economies.

We therefore continue to maintain a strongly underweighted duration in Czech government bonds.

Equities are generally expensive, due to the extreme overvaluation of the US market.

We prefer value stocks, emerging market stocks and commodity producer stocks.