Macro Economic Research
20
Apr
2015
Sterling’s election jitters subside


• Sterling vol suggests election risk is now in the price  
• Recent net gilt sales by foreign investors are driven by liquidity, not risk  
• The economic impact of political instability is in danger of being ov...

LSR Daily Note
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17
Apr
2015
The A-share plan


• China’s slumping growth and booming equity market appear a contradiction  
• But it’s in Beijing’s interest to boost Chinese equities  
• Whether this is a genuine bull market depends on the s...

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16
Apr
2015
Beijing’s gamble


• LSR estimates China’s real GDP fell 0.2% in Q1, the worst showing since the GFC  
• Real domestic demand plunged 2.1%, the first fall since our data began in 2004  
• Beijing is determined to take the pai...

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15
Apr
2015
BoJ forgiving JGBs would be a bodge


• Rich country governments are on the hook for their central banks’ liabilities  
• Central banks forgiving debt will not change total government liabilities  
• Such proposals are either to debunk Rogoff/R...

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Investment Strategy
17
Apr
2015
The end of “deleveraging”

Bond returns were surprisingly strong in Q1, considering the low level of yields they started the year at. The German curve is now negative up to 9-year maturities, and while other G4 bond markets offer higher yields, value is quickly vanis...

LSR Asset Allocation
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15
Apr
2015
Add to AUD shorts

As China slowdown continues unabated, the case for staying short AUD remains clear, especially given domestic Oz disinflation. We see further rate cuts from RBA and add a short AUD/CAD trade to our portfolio. Given our neutral oil price out...

LSR Portfolio Tactics
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08
Apr
2015
We add to our long $ trade

US negative surprises are common in H1. The latest low payrolls are a delayed reflection of the slowdown. We regard it as temporary and add long USD positions against KRW and SGD to our model portfolio. Both KRW and SGD are overvalued and n...

LSR Portfolio Tactics
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01
Apr
2015
How’s the market positioned?

While markets are long dollars and short euros, a big position unwind is unlikely without a reversal in relative macro fortunes. Markets are long short-end and short long-end Treasuries. We differ from the market and remain positioned for c...

LSR Portfolio Tactics
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