Risk-off Environment

• Global equities suffered their worst May in seven years as higher trade tensions and weaker economic data contributed to risk-off sentiment.
• Core global sovereign bond yields fell sharply as investors sought safety.
• The recent stabilization in downwards global growth momentum has abated.
• A growth uptick appears unlikely unless trade-related uncertainty is resolved or China stimulates more than expected.
• The market has shifted its Fed rate expectations substantially.
• We expect U.S.-China trade negotiations to linger for the next several months.