SC stick to the same themes they have held for the last year now. Namely over weight high yield equities and FI and under weight cash, money market funds. They like oil and gold for the geo political hedges they provide. I also include their fx round up and forward looking which is released today. For my own book I’m sticking a similar approach as SC’s though i remain very interested in what is occurring to the cyclical indicators and instruments and ever a watchful eye to increasing weightings to this sector due to the monetary conditions we have all around us.
Asia inc Japan and China are increasingly becoming important drivers for this next monetary wave either from stimulus in china’s case or debt monetization in Japan’s case. The xmas rally thus far muted and some key levels yet to be beaten. Momentum remains subdued which reflects the fund flows which remain disappointingly risk adverse. Get paid to weight with high yield equity and stay in the game. For day traders and position leveraged traders, the big pay days, care of cheap debt, are still in front of us. Patience may be a moral virtue but is also good for your wallet!
All the best Rich
Weekly market round up here:
FX report here:
P.S. On FX for a moment. Volatility and volumes falling in the fx markets. Central banks alongside the imf are acting as volatility policemen in these markets. Again it is Asia where things are starting to look more interesting with the BOJ threatening to print yen and purchase non yen denominated assets loading their balance sheet with these assets. This would inevitably lead to some very interesting moves in the fx markets assuming the BOJ walk the talk. (As they haven’t done in the last decade, remember)!
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