We do not expect this week’s heavy data and central bank calendar to prove the market’s ‘soft landing’ thesis conclusively. Uncertainty around the economic and market outlook is likely to endure in the second half of the year, with potential for cross-asset volatility to rise on increased data-dependency and shifts in market leadership.

While we cannot rule out further equity gains if US consumer prices undershoot expectations of a 4.1% year-over-year (YoY) headline rate and 5.1% YoY core reading, we believe investors should stay cautiously positioned in equities relative to highly-rated fixed income.