Macro Monthly

A healthy pause

06 Feb 2019

In addition to slowing global growth and trade tensions, the US Federal Reserve’s (Fed) 100 bps of tightening in 2018 was clearly a headwind for risk assets. The rate hikes pushed real yields on US cash into positive territory again, attracting flows away from longer duration risk assets. Steady rate hikes and reasonably hawkish Fed guidance also raised the discount rate on equities, contributing to a rather sharp derating despite strong earnings growth. Higher rates put upward pressure on the dollar and the cost of credit, tightening financial conditions for corporates. And finally, the steady rise in yields clearly weighed on certain interest-rate sensitive areas of the economy, most notably the housing market.

Distribution Partners

In order to proceed, you must confirm that you are a qualified investor based in Switzerland.

For marketing and information purposes by UBS.

For qualified investors/ professional clients only. The information and opinions contained in this document have been compiled or arrived at based upon information obtained from sources believed to be reliable and in good faith, but is not guaranteed as being accurate, nor is it a complete statement or summary of the securities, markets or developments referred to in the document. UBS Asset Management Switzerland AG and / or other members of the UBS Group may have a position in and may make a purchase and / or sale of any of the securities or other financial instruments mentioned in this document.

Before investing in a product please read the latest prospectus carefully and thoroughly. Units of UBS funds mentioned herein may not be eligible for sale in all jurisdictions or to certain categories of investors and may not be offered, sold or delivered in the United States. The information mentioned herein is not intended to be construed as a solicitation or an offer to buy or sell any securities or related financial instruments. Past performance is not a reliable indicator of future results. The performance shown does not take account of any commissions and costs charged when subscribing to and redeeming units. Commissions and costs have a negative impact on performance. If the currency of a financial product or financial service is different from your reference currency, the return can increase or decrease as a result of currency fluctuations. This information pays no regard to the specific or future investment objectives, financial or tax situation or particular needs of any specific recipient. The details and opinions contained in this document are provided by UBS without any guarantee or warranty and are for the recipient's personal use and information purposes only. This document may not be reproduced, redistributed or republished for any purpose without the written permission of UBS Asset Management Switzerland AG. Source for all data and charts (if not indicated otherwise): UBS Asset Management

This document contains statements that constitute “forward-looking statements”, including, but not limited to, statements relating to our future business development. While these forward-looking statements represent our judgments and future expectations concerning the development of our business, a number of risks, uncertainties and other important factors could cause actual developments and results to differ materially from our expectations.