SG Market Risk Outlook

Long macro investors should be forgiven for some of their gloom heading into 2019 – after all, they did just endure the worst year since the start of the global financial crisis, now more than ten years ago. With the exception of the US treasury bond market, long investors would have lost money in 2018 across all asset classes, including commodities, credit, sovereign debt, inflation bonds and of course equities.

There is a silver lining, however. Whenever we alter the assumptions that feed into our central scenario forecasts, the probability of any risk materializing shifts across our respective markets. Since October, certain risks have indeed either materialized, become less likely or been integrated into the central scenario. At the same time, few new risks have become manifest. In other words, and looking broadly across the different markets, the distribution of identifiable risks has compressed.

This 2019 edition of the SG Market Risk Outlook seeks to help you navigate these uncertainties, and to provide clarity and conviction on our key calls. We provide both conviction levels (how probable we see our base case scenario playing out) and quantified upside and downside scenarios across the principal asset classes, including equities, rates, credit, FX, emerging markets and commodities. Multiple risks to both the upside and downside by asset class are discussed.

SG Cross-Asset Research is composed of more than 200 Analysts, Strategists, Economists and Quant, combining their expertise into ‘Research-based’ and innovative solutions suited to client’ needs: fundamental studies and expert views, investment ideas and long-term strategies, trade ideas and tactical baskets, thematic and systematic indices, quant solutions. On top of its established UK and Western European base, SG Cross-Asset Research benefits from a global coverage thanks to its presence in the US and in Asia (Hong Kong, Singapore, Tokyo and Bangalore) and Societe Generale local networks in Eastern Europe.