Macro Economic Research
17
Feb
2017
Mexico: Between Trump and a hard place


• Falling growth, rising inflation and a volatile peso dominate the outlook  
• A renegotiation of Nafta is both possible and probable later this year  
• The rise of the left-wing populist López Obrador w...

LSR Daily Note
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16
Feb
2017
A good start to the Year of Rooster

This publication is part of our China In Depth service. Click here for more detail.
• Latest data confirm China’s cyclical reflation path  
• PBoC tightening has failed to curb shadow banking amid strong credit dem...

China In Depth
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16
Feb
2017
Euro Area: Benign election results not so ben...


• The European voter revolt may be doomed by its own polarising effect  
• Except for Italy, forthcoming elections in the EZ core pose remote tail risks at worse  
• But the post-election scene will remain politi...

Global Political Drivers
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16
Feb
2017
US inflation upswing takes hold – 3%in 2018


• Wage inflation has been held at 2½-3% by lagged perception of little inflation  
• Real wage gains were set at 2%-plus, and this means 2018 wages up 4%-plus  
• The Fed will have to hike hard and often &...

LSR Daily Note
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Investment Strategy
17
Feb
2017
Does asset allocation matter?


• Our cycle-driven asset allocation strategy has been live since 2014
• It has since beaten its constant-composition benchmark by 24%
• The cycle is turning from the Recovery to the Expansion stage
• This will likely wa...

LSR Asset Allocation
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15
Feb
2017
OATs: Oversold but even better value ahead


• OATs are oversold relative to fundamental macroeconomic anchors
• OAT-Bund should widen further, but we tighten the stop to lock in gains
• We also take 12% profit on short USD/RUB amid rising intervention risks
&n...

LSR Macro Strategy
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08
Feb
2017
Offshore USD shortage: an overplayed risk


• USD shortages in the offshore market aren’t news so aren’t a shock
• Dollar scarcity is partly endogenous; a weaker dollar will mitigate it
• We see limited further dollar upside, so don’t regard this as...

LSR Macro Strategy
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01
Feb
2017
EA peripheral spreads - what next?


• A QE unwind trade would argue for further peripheral spread widening
• On debt and inflation dynamics, BTPs may look too wide relative to Bonos
• But structural and idiosyncratic risk factors support the opposite case
...

LSR Macro Strategy
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