In today’s macroeconomic briefing we look at cross asset positioning with Macro Risk Advisors where there doesn’t seem to be any clear cut sentiment either way, with equities leaning towards defensives, while credit markets are seeing short covering, as are rates, with EM fairly neutral. Meanwhile, the BBB sector (risk of fallen angels) in the credit markets continues to garner a disproportionate amount of attention among commentators and he financial media, as the next big bubble to burst. This is fair, but Gluskin Sheff’s Dave Rosenberg argues that the bigger issue here is recession risk, because BBB-rated companies will do everything possible to avoid getting downgraded to junk. How do they do that? Cut capex, and that, says Rosenberg, sows the seeds for the next big recession, and the early signs of this happening are there to see, he says. Ned Davis Research weigh in on another precarious part of the credit markets, leveraged loans, while Viola Risk shine a light on the potential systemic risk in the European banking system emanating from France. Deutsche died 3 -years ago they say. It’s the French banks that investors need to be looking at. Lastly, we highlight the latest work from the inflation specialists, Economic Perspectives, where they look at both cyclical and structural drivers of the inflation outlook, and highlight these diverging trends.