Cross-Asset Views :Make European equities great again… but beware summertime

We think H2 will be decent for risk assets but we expect a difficult and volatile summer, with a deteriorating activity-inflation tradeoff, a still elevated political risk and interest rate risk vs high equity valuations.We expect a significant outperformance of European indices vs US. We do not believe in an equity decoupling (Europe up / US down) as short-term vulnerability in the US will probably spill over. But, barring country/regime-specific adverse news on the trade war, we think non-US stocks will have lower betas relative to US stocks, with several cyclical and structural tailwinds in Europe.