August began with a weak US July jobs report and abelow-expectations ISM manufacturing print. Together with the interest ratehike by the BoJ, fuelled fears about a US recession and sparked a sharpsell-off across most risk assets. However, it was short[1]lived, since by monthend, the market rebounded pricing in a more aggressive policy easing by theFed, allowing most markets to recover their losses by the middle of the month.Looking beyond the central banks, we see rate cuts as widely anticipated, andwhile bigger and more frequent cuts are possible if the recession enterunfolds, then it will be the weak economy, not the central banks operating,that will drive the markets. Several indicators are signalling weakness: (i)the inversion of the Treasury yield curve, (ii) the ISM survey, (iii) therecent nosedive in copper price, or (iv) a cooling job market with the SahmRule already warning the recession, all with (v) most markets trading near all[1]time-highs.That said, we consider it is time to be more conservative on a risk allocationin terms of both, equity exposure and credit duration.