Statements by the US Federal Reserve and the European Central Bank favouring a return to additional monetary stimulus had their impact on June. They cited weaker numbers on the economy, especially in the manufacturing sector, and the growing risk the US-China tariff war has been raising to global growth. The level of inflation also prompted them to consider supporting measures. Counter-intuitively, both risky and non-risky asset markets have reacted very positively to these announcements – even as the fundamentals were deteriorating. As a result, equity and credit markets rose sharply, as did sovereign bonds, gold and the yen. The markets have in fact simultaneously taken into account the fall in both Fed and ECB interest rates, as well as the return of Quantitative Easing, which they believe can prevent an economic recession. The consensus on US bond rate trends has changed dramatically with a 50 bps fall by the year-end now being expected, while six months earlier markets were anticipating a 50 bps hike! The G20's US-China talks have also given a measure of relative relief to investors as they look at the trade war between the two countries. Although no agreement is yet in sight, it seems that both parties are continuing to negotiate without open threats of escalating tariff barriers. In this climate, it is increasingly difficult for investors to position themselves. The central banks seem to want to re-inject liquidity into the system, while it looks unlikely that, at the current stage in the cycle, economic growth will be protected simply by a monetary stimulus of limited magnitude.