Economic outlook

A confusing outlook shows few signs of getting clearer

Uncertainty has become the normal state of mind among financial professionals, and our latest poll is no exception.
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Buy or sell? A trader in the S&P500 stock index options pit at the Chicago Board Options Exchange ponders his next move (AFP)</div>
<div style="text-align: left;"> Buy or sell? A trader in the S&P500 stock index options pit at the Chicago Board Options Exchange ponders his next move (AFP)</div>

A phrase, or variation of it, that is increasingly used by fund managers is the equivalent of the sportsman’s or politician’s cliché “cautiously optimistic”. This year they have been describing their investment strategy as being in “conservative risk-on mode”.

It’s not a particularly attractive phrase, and it is more often deployed by equity investors than bond investors, but it accurately reflects the dichotomy at play. On the one hand, a great deal of scepticism remains about a resolution of major problems in key economies throughout the world, which should temper an enthusiastic plunge into markets on the other hand, the liquidity that has been pouring from accommodating central banks since...

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