We believe we have entered a mature stage of the financial cycle amid central bank monetary policy normalisation (more advanced in the US) and decelerating economic growth globally. Protectionist dynamics are also features of this phase of the cycle, while the US fiscal expansion and a capex revival are all forces working to extend it.

The move to a late stage of the cycle is leading to a tightening in liquidity and financial conditions and to potentially more frequent episodes of volatility spikes, such as the one experienced in February. Market swings in 2018 have been the result of this new, less complacent and less directional market, which we expect will continue.