Macro Economic Research
29
Sep
2016
Buoyant UK consumers to fight off Brexit risk...


• Households shrug off post-Brexit uncertainty but business spending weakening  
• Buoyant consumers could cut a crucial link in the self-fulfilling downspiral  
• Something more than a marginal fiscal stimulus i...

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28
Sep
2016
Re-emerging markets


• EMs’ recent outperformance of DMs is likely to continue
• Sentiment, technical, macro and fundamental factors are supportive
• We have an 8% EM overweight in our Asset Allocation model portfolio
Andrea Cicion...

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27
Sep
2016
We won’t get fooled again


• On a trip to the US, European politics dominates investor concerns  
• The Brexit vote changed little but has sounded the alert to mounting EU risks  
• Donald Trump is a similar reminder of the fading veneer o...

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26
Sep
2016
Fiscal prominence


• Fiscal stimulus is now the consensus solution to low growth  
• Except, that is, among the people that decide: politicians  
• Yields should rise in 2017, but not due to helicopter money (etc.)
Dario Pe...

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Investment Strategy
28
Sep
2016
The dollar and the dovish hikes


• The Fed tightening cycle is a “dovish” one; the FOMC is unusually wary
• This key feature leaves very little prospective yield support for the dollar
• The best hope for dollar bulls is a global recession, not...

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26
Sep
2016
October 2016

The unviability of open-ended QE by the BoJ and ECB has helped core yields back up recently, giving rise to fears of a major bond market sell-off as in 2013. However, there are important differences from the 2013 UST taper tantrum. Nominal...

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21
Sep
2016
Taper tantrums unlikely for now


• The scarcity problem implies tapering, but not necessarily a major tantrum
• Yield targets, demand-supply and strategic demand remain supportive
• But, eventually, it comes down to one decisive factor – global inflat...

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16
Sep
2016
Bracing for higher volatility


• Volatility likely to rise more after being unusually low this summer
• Seasonality, valuations and political risks to keep markets on edge
• Fed to hike 3-4 times in a year, but USD upside still limited
• Govvies mini...

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