Macro Economic Research
03
May
2016
Australia – RBA playing defence


• RBA cuts as domestic and external macro tailwinds fade  
• Low-for-longer inflation symptomatic of tepid private final demand  
• Soft USD, CNY render AUD increasingly sticky on the downside Konstantinos Ven...

LSR Daily Note
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29
Apr
2016
Will China allow failures to fail?


• Beijing appears to be more relaxed about bond market defaults of late  
• This is a welcome development as investors learn to price in risks properly  
• The new debt-to-equity swap is sound in principle but wi...

LSR Daily Note
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28
Apr
2016
Credit limit

The euro-area credit cycle has lagged behind the US, partly reflecting the weakness of European banks. Investment spending has been particularly lacklustre. ECB efforts to revive lending should help, but only at the margin. Stronger demand...

LSR Macro Picture
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28
Apr
2016
Fed/BoJ policy paralysis


• Lack of a clear policy signal suggests no Fed rate hike in June  
• The Bank of Japan also did nothing, further fuelling yen appreciation  
• With Abenomics failing, BoJ policy is reaching a critical juncture...

LSR Daily Note
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Investment Strategy
27
Apr
2016
What is the yield curve telling us?


• Since the Feb 2010 highs, the UST yield curve has flattened nearly 200bp
• Flattening rather than inversion is a recession-risk signal when rates are low
• Banks will remain under pressure, though curve pricing isn’t...

LSR Macro Strategy
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25
Apr
2016
May 2016

A range of US activity indicators, including the ISM headline and new orders indices, have rebounded strongly in recent months (see Macro Drivers), but some others suggest that the global cycle remains stuck in a slowdown phase (see Multi A...

LSR Strategy Chartbook
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20
Apr
2016
US yield curve: the long and short of it


• Longer term, curve-flattening still looks more likely than steepening
• In the near term, only fleeting curve-steepening drivers are evident
• These include further policy dovishness, tantrum risks and MBS market shifts #...

LSR Macro Strategy
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15
Apr
2016
Light at the end of the cycle


• The global economic cycle has come very close to stall speed...
• ...but recession risks have receded: growth is likely to continue
• EMs’ recovery has legs as China stabilises: we go +1 on EM bonds
• The need f...

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