• Economics –– Forecasts of weaker Q4 global growth are on trackClick on chart to enlarge, courtesy of J.P.Morgan.
• Asset allocation –– Our overweights in EM, HY and UST duration, and short USD are consensus trades, but aside from USTs are not yet near a bubble
• Fixed Income –– Fed easing combined with ECB inaction should see US Treasuries outperform German Bunds.
• Equities –– Positive momentum and the prospect of more business-friendly policies post US mid-term elections should sustain the rally into November.
• Credit –– Overweight CLO mezzanine and subordinates in both US and Europe, with over 10% expected return over next 6 months.
• FX –– INR and KRW are our preferred longs vs USD in Asia.
• Commodities –– Pace of Chinese crude oil imports is increasing. Stay long oil.
Monday, October 18, 2010
Latest View From The House Of J.P.Morgan
Over the weekend global asset allocation team of J.P Morgan had the following view: