Even as concerns about a slowdown in the world’s second largest economy start to settle, investors are still kept on edge by heightened geopolitical tensions at a time when market valuations are high, according to Ermotti.
North Korea last week claimed it successfully tested an intercontinental ballistic missile.
Policy uncertainties from the Trump administration are also key for investors, even though risks from Europe have subsided somewhat after the French elections, Ermotti said.
“The geopolitical front is quite worrying in respect to what’s going on almost every day. Investors are really fundamentally touched by all those dynamics and they need to see a very prolonged and stable pattern going forward,” he said.