Epstein Secrets

uld spike. Note: Scenarios refer to global economic scenarios (see slide 7) What we're watching Why it matters Core market yields The direction of US Treasury and German Bund yields are important for EM fixed income spreads, especially for USD- and EUR-denominated bonds. Key date: Dec 6, European Central Ba

tion of US Treasury and German Bund yields are important for EM fixed income spreads, especially for USD- and EUR-denominated bonds. Key date: Dec 6, European Central Bank meeting Capital flows The European debt crisis may lead to further periods of outflows and weaker prices, which could offer attractive entry levels

conditions supportive of growth. While we expect the European Central Bank (ECB) to gradually shift to a more neutral stance

Institution has called the “fiscal fights of the Obama administration.” The first fiscal fight resulted in the Standard and Poor’s (S&P) downgrade of US Treasury debt in August 2011. The equity markets, as measured by the S&P 500 Index, dropped about 19% between April and October of 2011. Taken together, the

kets over the medium term. Valuations remain attractive, and the potential for spreads to trend lower should more than offset the gradual increase in US Treasury yields in the quarters ahead. We continue to prefer increasing exposure to corporate bonds while keeping existing investments in sovereign bonds. 36

quality. ¢ The economic recovery fails to gain momentum in the second half of the year. Credit demand fails to improve further as some of the recent European Central Bank (ECB) data indicates. The ECB cuts rates. ¢ Further quantitative easing by the Fed would be supportive for Bunds and speaks for lower yields. & Negat