The geopolitical, macro-economic and financial market situation is extremely fluid and uncertain. Inflation has come down to target levels in the major regions; in some cases even below. This means central banks can redirect their attention to the real economy and unemployment.

Here, the development is rather bleak. The three large economies USA, China and Germany are slowing, in different ways. Germany is in a deep and structural industrial recession, which will force the ECB to cut key rates more rapidly than previously announced. China is struggling with deflationary risks and has announced a jumbo stimulative package – which actually smells of desperation. The US sees a cooling of the labour market and weak expectations in manufacturing. But fears of a hard landing in this cycle seem overblown. The Fed is confident that they can manage a soft landing with step-by-step monetary easing.

Our view is that central banks will indeed cut, but not quite as deep and fast as markets are hoping. They may still undershoot the long-term equilibrium rate while fighting weak economies in the short term, but in the longer term the equilibrium rate in the "new normal" is above even the previous key rate peaks.

The same goes for Sweden, where the improving situation for households should prompt a return to consumption-driven growth next year – but inflation will remain low as energy prices remain depressed and interest rate costs for households fall. The Riksbank has room to speed up their rate cuts, but may want to keep some of the powder until next spring when CPI will be extremely low (probably even below zero) and political pressure on the bank will increase.

So, the general picture is pretty much the same as last month. Gentle slowdown in the US, dire picture in much of Europe. Rates coming down. The new story in this overall picture is the Chinese stimulus, which will bolster stock markets in China and parts of Asia. But this main scenario is challenged by political risks.

• We are just a month away from the US presidential election which – in the case of a Trump victory – could result in a dramatic change of economic policy, with higher tariffs, higher wage costs, higher inflation and higher interest rates, as well as a turf war with the Fed. Lower corporate taxes may mean a short-lived boost to the stock market. However, should Trump lose, we can expect his followers to protest and there is a risk that the entire electoral process will be deadlocked by judicial infighting. All in all, American politics at the moment constitutes a tremendous risk.
• The dramatic recent developments in the Mid-East also means higher risks. So far, commodity markets have remained surprisingly calm. That may be about to change as Israel has smashed Iran's proxies – Hamas and Hezbollah – and an armed conflict directly between Israel and Iran is looming. This could send oil prices spiking and create a number of financial domino effects.

Global financial markets are consequently in a state of flux. At the moment, stock markets in general are optimistic about future profits while bond markets see risks and are more careful.

We tend to agree more with the bonds. The acute political risks will probably affect many risky assets negatively. In this situation, cash is king. At Dahlgren Capital, we use cash to be prepared for interventions in low-risk stocks and bonds when such opportunities appear. Overall, we stick to our unlisted holdings which generate cash flow.