Macro Economic Research
29
Jan
2015
Danger zone

Greek political risks and falling euro-area prices have made investors nervous about the European outlook. The ECB’s aggressive QE programme should help, mainly by depressing the euro and supporting inflation expectations. But ECB QE...

LSR Macro Picture
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29
Jan
2015
Modi’s acid reform test


• India faces a few critical weeks for lawmakers to ratify reforms  
• The economy is in a sweet spot  
• But failure to break parliamentary deadlock will weigh on investor sentiment
Shweta Singh

LSR Daily Note
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28
Jan
2015
The bond market mechanics of ECB QE


• The efficacy of QE depends on the design of programmes, not just their size  
• Buying EGBs will allow the ECB to provide liquidity directly to the real economy  
• And negative deposit rates will pressure bank...

LSR Daily Note
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27
Jan
2015
Finding NAIRU


• Unemployment is approaching the Fed’s NAIRU range  
• But NAIRU estimates are uncertain and imprecise  
• Maybe officials became too pessimistic about unemployment after the recession
Dario Perkin...

LSR Daily Note
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Investment Strategy
28
Jan
2015
Macro trades on ECB QE

What the ECB delivered last Thursday was probably a notch above the upper end of market expectations. While the Greece situation may lead to a nonlinear course hereon, we still think the euro will see significant further weakness (perhaps w...

LSR Portfolio Tactics
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26
Jan
2015
February 2015

Fair value estimates of 10-year Treasury yields suggest that current market levels of 1.80% are too low. Even under a under a “secular stagnation” scenario (1½-2% growth, 1% inflation, 0.25% term premium, on average for t...

LSR Chartbook
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21
Jan
2015
Assessing the damage from SNB

The SNB’s shock removal of the 1.20 floor in EUR/CHF appears to have divided investor opinion significantly on the outlook for not only CHF but what might be in store for other consensus opinions like long USD. We feel further CHF str...

LSR Portfolio Tactics
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16
Jan
2015
Oil slippery slope

The precipitous slide in oil has rattled financial markets. Bonds have rallied on intensified deflationary pressures, while equities have sold off. We believe that the inference that falling oil prices imply a de-rating of global growth i...

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