‘There are major bull markets out there, such as the Nasdaq -- one of the strongest equity markets. It has been a bull market for the past seven years that has even got a reacceleration lately.’

The second is the US dollar bull market, built on the theme of the continuing strength of the reserve currency. ‘It is the dominant theme of 2017. As the US is at the forefront of stimulus, the US dollar benefits the most.

‘This is a long cycle that’s been underway. We expect it to continue even though it’s been underway for a long time. Usually you see a turning point after eight or nine years. We don’t see that at this juncture and this means further USD strength in the months ahead,’ said Gattiker.

The third market he pinpoints is less obvious.

‘It may be a niche theme but it is dominant for Swiss investors especially -- mid caps and smaller companies in Switzerland that have some of the strongest assets in the world, from a Swiss franc perspective.’

Credit risk over duration risk

With the rise in interest rates comes duration risk.

‘Higher growth and higher inflation rates means higher rates overall. This is bad news for anybody who holds very long duration, holds these crisis assets, 30-year Treasuries or long-dated German bonds,’ said Gattiker.

‘There will be tactical opportunities, we think, so it’s time to be more on the credit side. Take corporate risk, take spicy issuances, but don’t really go into the very long duration.’

Cyclicals on the rise

‘Equities also play in the same tune as growth, inflation rates and the fixed income market,’ said Gattiker.

‘And if we look at how badly global cyclicals have done versus defensives - the ones who were very sensitive to the business cycle to the ones who were very resilient – we see a major underperformance over the past seven years.’

‘Even after the Trump election, this has only reversed in a minor way. We expected more of a reversal, which means investors should be more exposed to cyclicals going forward.’