We have revised our investment scenarios as the US-China trade dispute has intensified.

* In our base case, we expect a trade deal or truce over the next six months, though only after a bumpy negotiation process that potentially leads to spikes in market volatility.

* We still see a risk (30%) that negotiations will break down and the US raises tariffs on the balance of its imports from China. We see little chance (20%) of a breakthrough at the G20 summit at the end of June.

* In anticipation of rising trade tensions, we recently made changes to our House View positioning.

* In addition, we certain countercyclical positions in our portfolio to protect against near-term uncertainy. Overall, we hold a small risk-on investment stance.

* This report also highlights asset classes we expect to outperform should trade tensions escalate further.