As we see with recent events in the US banking sector, investors are still facing a fair amount of uncertainty. The key will be to evaluate at what point the risks are sufficiently recognized by the market and, as such, well-reflected in prices. Our central scenario of a global economic recession is still intact. In fact, recent events may have increased our conviction at the margin. However, the tail risk of a more severe negative outcome cannot be ignored. On the other side, there is still a possible way to achieve the desired soft landing. Given such views, our strategy continues to favour cash and government fixed income over equities. The potential decline in bond yields will be limited by the inflation outlook. However, in a recession, bonds are expected to generate small positive returns. This is a contrast with equities, which will face pressure on earnings and valuation.