FYI: With Global bond markets distorted by central bank policies, currency
markets have been the transmission mechanism for
rebalancing global growth; after nearly two years of
elevated volatility, we see the convergence of real interest
rates, inflation and growth keeping the US dollar rangebound
and offsetting the forces of nominal policy
divergences; equity market leadership is apt to pass from
US to non-US stocks; investors underappreciate the
impact of renminbi depreciation versus the trade-weighted
basket; China successfully navigating soft landing, and
better European credit growth should cement the rotation
by the year’s end. Consider rebalancing global equity
allocations to square non-US positions; also, the GIC will
be monitoring hedges if the euro hits $1.10.
Regards,
Ted
http://www.morganstanleyfa.com/public/projectfiles/gicweekly.pdf
