Global economic expansion has entered its 10th year. With bumpy and brittle growth giving way to a robust and synchronised conjuncture, an ageing cycle has suddenly become much more cyclical.

Late-cycle booms typically mark the beginning of the end. As spare capacity erodes and central banks focus on removing accommodation, risk of accidents in the real economy or in markets is rising. Investors must prepare for a potentially long period of more volatile and plateauing asset prices, as it often precedes bear markets.

Nothing in the data suggest a global recession is imminent. Unlike in the past few cycles, consumers have been relatively thrifty, house prices do not look excessive, and the corporate sector has not over-invested in fixed capital. Conditions remain favourable despite higher equity volatility. Fiscal policy is expansionary, especially in the US.