Q4 Multi-asset outlook: Unfinished business

At the end of Q3, the majority of the world’s major indices have registered double-digit losses year-to-date across most categ of equities, corporate debt, and government bonds. An easing of inflation should take some pressure off central banks, interest rates and financial markets. But if underlying infl remains stronger for longer, then the bear markets in equities and bonds could have further to run. As we approach the peak in rates, we expect that the correlation between government bonds and risk assets to weaken, allo the former to regain their diversifying characteristics in multi-asset portfolios.