We see the medium-term (6-12 month) environment remaining constructive for risk markets. These supportive conditions include global central banks stuck in ‘easy money’ mode (ECB, BoJ, PBoC, BoE) and/or demonstrating patience (U.S. Federal Reserve) alongside a diminished size of the full rate hike cycle. As well, economic growth risks continue fading, the U.S. dollar’s appreciation looks capped, commodities (in particular oil and gold) are stable/recovering, cyclical sector and international market exposure remains cheap and under-owned, investor cash levels remain high and Q2 earnings reports largely beat expectations. We take heart in a variety of confirming signals over the past few months including value/cyclical sector outperformance, recovering fund inflows, improving economic data, etc. Following recent strong gains over the past two months, there is ample scope for near-term profit-taking pullbacks. However, we would use any material market weakness as an opportunity to deploy large overweight cash allocations.