- •Clients have the late cycle blues. Us too.
- •But we disagree with consensus on a few things: the Fed…
- •…and the dollar…
- •…and investors are now more bullish on EM. We are not.
- •Raw data
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- •Analyst Certifications and Important Disclosures
- •Important Disclosures Continued
- •Disclaimer
- •Disclaimer (continued)
vk.com/id446425943
Raw data
Foreign exchange
What is your favourite currency long?
50% |
|
Q4 2018 |
Q3 2018 |
45% |
|
40%
35%
30%
25%
20%
15%
10%
5%
0%
USD |
JPY |
EUR |
GBP |
AUD |
CAD |
CNY |
Other DM |
CEE3 (PLN, |
Low-yield Asia |
High-yield EM |
|
|
|
|
|
|
|
Europe (CHF, |
HUF, CZK) |
(KRW, SGD, |
(BRL, INR, IDR, |
|
|
|
|
|
|
|
Scandinavia) |
|
TWD, etc) |
ZAR) |
What is your favourite currency short?
25%
Q4 2018 |
Q3 2018 |
20%
15%
10%
5%
0%
USD |
JPY |
EUR |
GBP |
AUD |
CAD |
CNY |
Other DM Europe |
CEE3 (PLN, HUF, |
Low-yield Asia |
High-yield EM |
|
|
|
|
|
|
|
(CHF, |
CZK) |
(KRW, SGD, TWD, |
(BRL, INR, IDR, |
|
|
|
|
|
|
|
Scandinavia) |
|
etc) |
ZAR) |
Restricted - External
18 |
December 14, 2018 |
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Raw data
Foreign exchange
What is your three-month forecast for EURUSD?
30% |
|
|
|
|
25% |
|
|
|
|
20% |
|
|
|
|
15% |
|
|
|
|
10% |
|
|
|
|
5% |
|
|
|
|
0% |
|
|
|
|
Below 1.10 |
1.10 - 1.12 |
1.12 - 1.14 |
1.14 - 1.16 |
Above 1.16 |
What is your three-month forecast for EURGBP?
What is your three-month forecast for USDJPY?
40% |
|
|
|
|
35% |
|
|
|
|
30% |
|
|
|
|
25% |
|
|
|
|
20% |
|
|
|
|
15% |
|
|
|
|
10% |
|
|
|
|
5% |
|
|
|
|
0% |
|
|
|
|
Below 107 |
107-110 |
110-113 |
113-116 |
Above 116 |
What is your three-month forecast for USDCNY?
40% |
|
|
|
|
35% |
|
|
|
|
30% |
|
|
|
|
25% |
|
|
|
|
20% |
|
|
|
|
15% |
|
|
|
|
10% |
|
|
|
|
5% |
|
|
|
|
0% |
|
|
|
|
Below 0.85 |
0.85-0.87 |
0.87-0.90 |
0.90-0.92 |
Above 0.92 |
45% |
|
|
|
|
40% |
|
|
|
|
35% |
|
|
|
|
30% |
|
|
|
|
25% |
|
|
|
|
20% |
|
|
|
|
15% |
|
|
|
|
10% |
|
|
|
|
5% |
|
|
|
|
0% |
|
|
|
|
Below 6.80 |
6.80-6.90 |
6.90–7.00 |
7.00–7.10 |
Above 7.10 |
Restricted - External
19 |
December 14, 2018 |
vk.com/id446425943
Raw data
Foreign exchange
The most important driver of EURUSD will be:
40%
Q4 2018 Q3 2018
35%
30%
25%
20%
15%
10%
5%
0%
Fed policy ECB policy |
China's |
EU politics US politics |
US |
US trade |
|
policies |
|
fiscal/current |
policy |
|
|
|
account |
|
|
|
|
deficit |
|
The most important driver of USDJPY will be:
35% |
|
Q4 2018 |
Q3 2018 |
30% |
|
||
|
|||
|
|
|
25%
20%
15%
10%
5%
0%
Fed policy |
BoJ policy |
Japanese |
US politics |
US |
Global risk |
Valuation Geopolitics, |
|
|
politics |
|
fiscal/current |
appetite |
eg, North |
|
|
|
|
account |
|
Korea |
|
|
|
|
deficit |
|
|
Restricted - External
20 |
December 14, 2018 |
vk.com/id446425943
Raw data
Emerging markets
In terms of your overall risk profile, how are you positioned toward EM assets? Please rank your position on a scale of 1 to 5 (1 = most underweight risk; 5 = most overweight risk)
45% |
|
|
|
|
40% |
|
|
|
|
35% |
|
|
|
|
30% |
|
|
|
|
25% |
|
|
|
|
20% |
|
|
|
|
15% |
|
|
|
|
10% |
|
|
|
|
5% |
|
|
|
|
0% |
|
|
|
|
1 = Most |
2 |
3 |
4 |
5 = Most |
underweight risk |
|
|
|
overweight risk |
In your view, what will be the major risk for EM credit spreads in 2019?
40% |
Q4 2018 |
Q3 2018 |
|
35% |
|||
|
|
30%
25%
20%
15%
10%
5%
0%
Slowing EM |
Developed market Core central bank |
EM-specific |
Technical factors |
Other |
|
growth, pressure |
politics (US, |
policy |
events (EM |
(potential |
|
on EM |
Europe), potential |
normalization, |
elections, etc.) |
outflows from EM |
|
fundamentals |
sanctions, trade |
US/core rates |
|
bond funds, |
|
|
protectionism and |
trajectory |
|
supply, etc.) |
|
|
broader |
|
|
|
|
|
geopolitical risks |
|
|
|
|
On a risk-adjusted basis, which EM asset class is likely to perform best in the next three months?
35%
Q4 2018 Q3 2018
30%
25%
20%
15%
10%
5%
0%
Corporate credit, |
Equities |
External |
Foreign exchange Local currency |
including quasi- |
|
(sovereign) debt |
debt |
sovereigns |
|
|
|
What is your total return expectation for EM credit in 2019?
40% |
|
|
|
|
35% |
|
|
|
|
30% |
|
|
|
|
25% |
|
|
|
|
20% |
|
|
|
|
15% |
|
|
|
|
10% |
|
|
|
|
5% |
|
|
|
|
0% |
|
|
|
|
Worse than -3% |
-3% to 0% |
0% to 3% |
3% to 6% |
Better than 6% |
Restricted - External
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December 14, 2018 |