Buying Gilts Still Makes Absolutely Great Sense: HSBC's Kettner

The transcript discusses the uncertainty surrounding Brexit and its impact on market predictions, particularly in the UK. It highlights the unexpected performance of UK mid caps compared to large caps despite Sterling's decline. The discussion then shifts to the potential of investing in gilts, considering the structural economic challenges in the Eurozone. Finally, the transcript addresses the volatility in Sterling and European equities, noting the hedging activities in the market.

What is the main challenge in forming a base case for markets according to the speaker?

• The stability of the Eurozone economy

• The unpredictability of Brexit outcomes

• The rise in global interest rates

• The performance of US equities

Why does the speaker find it difficult to make active decisions in asset allocation?

• Because of the stability in large caps

• Due to the counterintuitive performance of UK mid caps

• Due to the high interest rates in the UK

• Because Sterling is rising

What structural perspective does the speaker have on buying gilts?

• They are not recommended due to Brexit uncertainties

• They are risky due to high UK inflation

• They make sense due to the Eurozone's slowing growth

• They are less favorable compared to US bonds

What is the speaker's view on the potential for the 10-year gilt yield?

• It will outperform US Treasury yields

• It will remain stable regardless of Brexit

• It may turn negative on a no-deal Brexit

• It will likely increase significantly

What does the speaker suggest about the future of currency volatility?

• It will become unpredictable

• It may not increase much further

• It will remain at current levels

• It will decrease significantly