Bonds Offer Attractive Risk Return Despite Near Term Volatility

UBS maintains a positive outlook on quality bonds and global equities despite yield volatility caused by geopolitical tensions and inflation data. They specifically highlight European industrials as a beneficiary of increased defense spending.

Key Takeaways

• 1.Quality bonds offer an appealing risk-return profile despite rising global yields and volatility driven by inflation concerns.
• 2.The equity rally is expected to withstand higher yields due to resilient economic growth and company profits.
• 3.European Industrials are rated as 'Attractive' due to a major structural investment cycle in defense and infrastructure.

Table of Contents

• From the studio
• Thought of the day
• What to watch: 19 May
• Caught our attention
• Market update
• Global asset class preferences definitions
• Appendix

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