5 themes and tactical trades for investors
Global growth around trend
Long local currency EM debt
- real effective exchange rates for EM currencies close to all time low
- global inflation falling and Fed maintains lower for longer
Central banks to extend the cycle
Long 10y US breakeven
- play on inflation expectations
- Fed likely to let inflation overrun and so potential upside for US Treasury yields
China to find a cyclical bottom
Long China H equities vs Taiwan equities
- Global tech cycle that Taiwan is exposed to is slowing
- Recent 4x increase in weighting of onshore equities likely to boost flows that will lift offshore Chinese equities
High volatility regime to stay
Long Yen vs Dollar
- Yen is a risk off currency and strengthens when risk aversion is high
- Protects investors from any sharp change in overall investor risk appetite
Geopolitics and protectionism
Short AUD vs USD
- AUD is a global demand bellwether
- Hedge against any escalation of trade tensions or failure of China policy to support growth outside of US
Perspectives matter. Tune in to our insights.
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