While markets have in many cases recovered from their Brexit jitters, we are remaining cautious. There is still significant uncertainty surrounding the consequences and timeframe of the eventual exit of Britain from the EU. Likewise, we are skeptical of the sustainability of the recovery in risk assets which seems in large part premised on more central bank support rather than improving underlying fundamentals. In fact, some significant question marks hang over US profits and whether the moderation we’ve seen recently proves temporary. The more muted response of other assets can be at least in part attributed to the pressure Brexit puts on central banks in general to continue to pile stimulus into the global economy. The “bad news is good” mentality is alive and well. We discuss this further in “Risk and reward: Finding the perfect balance” (VIEW LINK)