The return of policy divergence政策的回归

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1、405June2018June2018ThereturnofpolicydivergenceKeytakeawaysPolicydivergenceiscomingbackontotheagendaCoreinflationisstrengtheningintheUS,butremainsWeremainoverweightglobalequitiesandlocal-currencysubduedinmanyothereconomies.Giventhestrengthofemergingmarket(EM)governmentbonds.Weals

2、oretainUSgrowthamidfiscalstimulusandalikelylackofspareourunderweightstanceondevelopedmarket(DM)capacity,thebalanceofrisksisinfavouroffurtherwideninggovernmentbonds,andglobalinvestmentgrade(IG)andofinflationdifferentialsbetweentheUSandothercountries.high-yield(HY)corporatebondsThi

3、shasgiventheFedenoughconfidencetopushaheadwithratehikes,whilstothermajorDMcentralbankshaveGlobalequitieswerelittlechangedinMay,assolidrecentlybecomemorecautiousinexitingtheircorporateearningsreleasesandbroadlyrobusteconomicaccommodativepolicystance.Thereturnofthepolicydatawasoff

4、setbyvolatilityinemergingmarketassetsdivergencethemehascontributedtohigherUSTreasuryyields,improvingtheirrelativeattractivenessversusotherTheFedleftpolicyratesonholdinMayandreiteratedtheirDMgovernmentbondmarkets,whichremainovervaluedin“symmetric”inflationtarget,suggestingthatthe

5、ycouldourview(alongwithDMcorporatebonds).tolerateamodestinflationovershootWecontinuetopreferglobalequitiesandEMassetsasIntheeurozone,itappearsthattheremaystillbesomethebestwaytobenefitfromtheupbeatglobalgrowth“one-off”factorsholdingbackgrowth,butunderlyingenvironment(evenifsomem

6、omentumhasbeenlostthismomentumalsolookstohavefadedyear).Corporatefundamentalsremainstrong,andwehavehadabumperearningsseasonacrossbothDMandEMeconomies.ForEMassets,arisingUSdollarisapotentialChina’seconomicactivityremainssolid,althoughamidheadwind,alongwithhigherUSinterestrates,re

7、flectedinheightenedexternaluncertainties,policyislikelytoturnrecentvolatilityinEMassetprices.However,historicallessrestrictiveevidencesuggeststhatagradualincreaseinthedollardoesnotnecessarilyposeamajorrisk.Importantly,divergentInJapan,CPIinflationisexpectedtoremainwellbelowpolit

8、icalandeconomicregimes,aswellstructuralt