Continue de-risking. We had hope last week the war would end sooner; those hopes are now pushed back.

We have an inflation problem, big and getting bigger. The idea that we had the worst pass for inflation is probably not the case.

We have a week's worth of data for April and the annual inflation rate in the US is already above 4% and still rising very quickly. This is already a much bigger shock than March 2022.

Possibly. If inflation pressures continue to rise, there's a risk the market assumes the ECB will tighten but the Fed won't.

Markets are confident the ECB will not accommodate higher inflation generated by oil prices. There's an open question for the US - maybe the Fed will look through this, especially if growth data deteriorates. There's a bigger risk at the long end of the US market than in Europe.

Retail sales next week could be quite a bad number. I worry the longer this goes on, we might start using the word recession more.

The Chicago Fed estimate for March retail sales is down 1% on the month in real terms.

If you look at the six markers the NBER uses to date recession in the US, quite a lot are near recession territory. Even in the US, where the starting point is better, there are recession risks.

The thing that worries us most is that even though investors have de-risked, there is still a significant overweight in equities to be unravelled and plenty of room to go back into cash.

Investors have rebalanced back into tech because these are cyclical risks. But then, straight back into cash. Lower growth, higher inflation, and fiscal risks isn't great for the long end of the bond market either. De-risking right now means out of equities into cash.