Despite a series of key macroeconomic events ahead, there has been very little macro investing in the run-up to them, Goldman Sachs International's co-head of macro and markets research told CNBC on Thursday.
Macro investing strategies entail investing on the basis of forecast changes in economic policies such as interest rates and inflation or significant political events.
Francesco Garzarelli cited three key areas of focus: Brexit, the Federal Reserve and its intention to hike interest rates, and how that will affect China.
"People know that these things are out there but they really don't know which direction they're going to take so the powder's being kept dry for the events realized and then we'll see some macro direction and asset price breakout," he explained.
He said the bank's view is that inflation will tick up in the U.S., which in turn will challenge the view that the Federal Reserve will only hike rates very gradually, in "baby steps".
"If that happens and growth remains resilient, then we may see indices remaining flat on the stock market, a rotation within the indices favoring financials…favoring small caps versus large caps, and a steepening of the yield curve," he said.
In a note released last month, Goldman said: "After a rough start to the year, when fear of a slowdown in global growth and lower commodity prices took its toll on market expectations of future price increases, U.S. 'break-even' inflation has staged an impressive comeback."
The Fed has hinted at a rate hike in June or July.