The breadth of the USD rally could have further to run; we close our short USD-BRL position
• Expectations for a hawkish BCB have diminished in recent weeks, despite still-high inflation
• The BRL’s carry remains attractive; we await better level...
In a carry-driven environment, the BRL should outperform in coming quarters
• The start of a central-banking tightening cycle further strengthens the BRL outlook
• Current BRL levels compare favourably to historical valuations and positioning is c...
We recently revised our Latam FX forecasts in the wake of the Fed’s QE3 policy announcement
• While QE has historically been positive for Latam currencies, we observe clear diminishing returns
• Regional central banks will fight USD weakness, exc...
Top 3 data/events
• Singapore – NODX growth expected to be moderate
• Germany – ZEW survey to point to weaker sentiment
• United States – Maintain pay 5Y swap spread position
• Market focus
• We believe that hopes of further QE are optimistic ...
Top 3 data/events
• Philippines – BSP is likely to keep rates on hold for the remainder of 2012
• Euro area – Chancellor Merkel to outline her stance ahead of the G20 meeting
• US – We forecast weaker-than-consensus May retail sales
• Market foc...
Top 3 key events and data
• China – Late-quarter slide in USD-CNY may bring April rebound
• Hong Kong – Retail sales likely remained resilient
• US – Durable goods progress endures
• Friday’s FX rebalancing will likely result in h...
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This report provides an economic outlook for more than 60 economies worldwide and investment implications for commodities, credit, equities, FX and interest rates markets in 2014. We expect a better 2014, with world economic growth picking up and inflation staying benign. Global growth should increase to 3.5% in 2014 from 2.7% in 2013, helped by improvements in economic activity in the US and Europe. A pick-up in growth in the West is good news for the rest of the world, and we expect emerging economies’ growth to outpace G7 growth by almost 4 percentage points.
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