HOUSE_OVERSIGHT_014453.jpg
Extraction Summary
0
People
10
Organizations
10
Locations
0
Events
0
Relationships
1
Quotes
Document Information
Type:
Financial strategy report / research note
File Size:
Summary
This document is page 22 of a 'Global Cross Asset Strategy - Year Ahead' report dated November 30, 2016, produced by Bank of America Merrill Lynch. It details financial risks associated with various market sectors including Equity, Fixed Income, Volatility, and FX trades, referencing central bank policies (Fed, ECB, BOJ, BoE). The document bears the Bates stamp HOUSE_OVERSIGHT_014453, indicating it was part of a document production for the House Oversight Committee.
Organizations (10)
Locations (10)
| Location | Context |
|---|---|
Key Quotes (1)
"Trade tensions with the new US administration an additional risk now."Source
HOUSE_OVERSIGHT_014453.jpg
Quote #1
Full Extracted Text
Complete text extracted from the document (2,095 characters)
Risks to trades
Equity trades
• The risks to long divi basket & Pharma trades are a steepening of rates curves and better than expected growth outside of Europe causing investors to rotate out of bond proxies. Plus our analysts’ expectations of improved earnings from the healthcare pipeline not coming through.
Equity trades
• The risks to long divi basket & Pharma trades are a steepening of rates curves and better than expected growth outside of Europe causing investors to rotate out of bond proxies. Plus our analysts’ expectations of improved earnings from the healthcare pipeline not coming through.
• The risks to trade dividend future trade is lower than expected profits for major European sectors, e.g. Banks, Oils, causing a correction in dividend expectations.
• The risk to EM Asia ex-Japan is from a stronger USD and faster than expected US rates hiking cycle. Trade tensions with the new US administration an additional risk now.
• Risk to long Nikkei trade is a reversal of JPY weakness or a change in policy by the BOJ.
Fixed income trades
• The risks to the US rates trades are a dovish Fed responding to a tightening of monetary conditions before the fiscal boost kicks in. Disappointment on the fiscal stimulus also a risk. The risk to the UK inflation trade is that the BoE doesn’t respond to expected rising inflation by raising rates faster.
• The risks to the US rates trades are a dovish Fed responding to a tightening of monetary conditions before the fiscal boost kicks in. Disappointment on the fiscal stimulus also a risk. The risk to the UK inflation trade is that the BoE doesn’t respond to expected rising inflation by raising rates faster.
• The risks to the Industrial spreads trade is a deterioration of US industrial growth and step away from credit purchasing by ECB/ BoE.
• The risks the AT1 trade are the ECB pulling out of the credit markets causing a correction in the riskier portion of the market and bank profitability deteriorating raising concerns about default.
• The risks to our XOVER trade are Eurozone growth disappointing and a risk-off event in markets causing a flight to quality amongst credit investors.
Volatility trades
• Our equity vol trades are hedges, the risks are that they expire worthless due to the lack of a financial event in China and persistent low vol spread in equity markets supported by higher growth.
• Our equity vol trades are hedges, the risks are that they expire worthless due to the lack of a financial event in China and persistent low vol spread in equity markets supported by higher growth.
FX trades
• The main risk to our FX trades is of a more dovish than expected Fed, a more hawkish than expected BOE, improved politics in South Africa/weaker oil price and a more dovish Riksbank.
• The main risk to our FX trades is of a more dovish than expected Fed, a more hawkish than expected BOE, improved politics in South Africa/weaker oil price and a more dovish Riksbank.
22 Global Cross Asset Strategy – Year Ahead | 30 November 2016
Bank of America Merrill Lynch
HOUSE_OVERSIGHT_014453
Bank of America Merrill Lynch
HOUSE_OVERSIGHT_014453
Discussion 0
No comments yet
Be the first to share your thoughts on this epstein document