Macro Economic Research
31
Aug
2016
The UK after Brexit: hanging in there


•  Data suggest the economy was in a healthy state before the EU referendum
•  Survey indicators have deteriorated but, as yet, not dramatically
•  Counter-cyclical fiscal policy and weak sterling will help...

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30
Aug
2016
EA credit shrugs off Brexit


•  EA money growth consistent with above-trend growth
•  Adjusted credit growth accelerates as non-financial firms shrug off Brexit vote
•  Money and credit growth brisk in France and Germany while Spain and...

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29
Aug
2016
Rising US labour costs squeeze profits


• Profits and EBITDA have been falling since 2014 Q3 as a share of GDP  
• The long slide in companies’ labour costs that ended in 2013 has reversed  
• Slumping productivity growth means real wages are out...

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26
Aug
2016
China’s housing: too many in wrong places


• Policy efforts to reduce housing inventories have achieved some success  
• But over-building in the old industrial regions remains serious  
• Policymakers’ focus now shifts to bursting bubbles in top ti...

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Investment Strategy
31
Aug
2016
New Trade: buy 10y USTs / sell 10y Gilts


• Hikes do not mean higher 10y yields; the correlation has structurally declined
• US inflation should accelerate in 2017, but will probably moderate near term
• Gilts on the other hand are overbought given the inflationary...

LSR Macro Strategy
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30
Aug
2016
September 2016

Euro area equities remain unloved and probably underowned. To some extent this is understandable. The market has only just gone through the Brexit shock – from which, truth be told, it has recovered swiftly – but potentially big...

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24
Aug
2016
Political storms brewing


• Volatility is low for now but political risks will increase in coming months
• A perfect storm of Italian, French and German key votes is brewing
• Unless it comes ashore early, EA stocks can outperform US in the near term...

LSR Macro Strategy
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17
Aug
2016
Fiscal stimulus and the bear case for bonds


• A possible shift of emphasis to fiscal stimulus is a major risk to core bonds
• It worsens the demand-supply balance even in the absence of inflation
• Joint monetary-fiscal stimulus can impair bonds’ recession-hedgi...

LSR Macro Strategy
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