In the very short-term, there could be a sell-off. I think there's be a big repricing event to happen, I just think we have got one more leg-up in risk, i.e. in equities, and one more leg higher in bond yields before we get to that point.
We've gone from thinking that Trump was our devil to thinking he was our savior; post-election. We are now in a world where we think Trump cannot tie his own shoe laces, because he can't get anything done in Washington. At the moment the market seems to want to give Trump, reflation stories, deregulation stories the benefit of the doubt.
US Tax Reform
Some kind of tax reform bill will have to be delivered in the next few months, the market will like that. I think what the market will come and say is, 'Is that it?'
Market-wise the belly of this year could be OK. We could get a decent positive re-pricing of equities in Europe post the French elections. I think the market will assume their version of Trump reflation will be a (Emmanuel) Macron plus (Martin) Schulz type of reflation.
Much beyond that we come back to the same old poise, globally we have more debt on our balance sheets than ever before, demographics are rapidly deteriorating, attitudes towards immigration are hardening. So the thing that kept our generation young is falling away, globalization, technology aren't going away; these are massive things. (Political uncertainty) is just noise in that big story. Globalization and technology are not going away, they are very dis-inflationary.