Daily Note – Where do we go from there?

signsSummary:

United States: Some thoughts on US equity and bonds

Eurozone: Tsipras falling in polls

China: Is QE coming to China?

 

 

Good morning,

Cold one in Dublin this morning. Apologies for being late but I had to listen to a global CEO speak this morning in town.

One of our core views remains that while we see the Federal Reserve hiking rates at least once this year, this process, while likely to create volatility, will in the medium-term be a pleasant experience.

We argued:

1) That the first rate hike when it comes (June or September) will likely be the start of a very slow and gradual move higher in Fed rates.

2) That the rate path would be shallower than past hiking cycles (warranted by weak demand, spare capacity and deflationary pricing pressures)

3) That constraints on credit growth would continue to limit the scope for growth and inflation surprises

 

Download a FULL PDF version of the Daily Note:

Global Macro-Daily Note 28th April 2015

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