Epstein Secrets

e appreciation of the yen, once again pushing the Bank of Japan’s (BOJ’s) 2% inflation target further into the futu

u of Labor Statistics BOE: Bank of England BOJ: Bank of Japan CAGR: compound annual growth rate CDS: credit de

Settlements BLS: Bureau of Labor Statistics BOE: Bank of England BOJ: Bank of Japan CAGR: compound annual growth

and the resulting consensus view that the UK was destined for recession. Although the 20% decline in the trade-weighted sterling and rapid easing by the Bank of England were no doubt pivotal in avoiding that fate, the immediate impact of the Brexit referendum has been far less destructive than feared. But as we begi

lar to QE itself. Beyond that, this is another small step towards perceptions that monetary policy is no longer independent from fiscal policy, like the Bank of Japan’s joint statement with two government ministers last month. Nobody knows the tipping point at which these perceptions feed into much higher inflation e

ream of the tumbling equity market. President Obama’s re-election perhaps also diminishes expectations of a change in course at the Fed. The ECB and the Bank of England stood pat at their policy meetings this week, but the latter delivered a curveball today, announcing that its net coupon income from QE would be tran

k of England supports equities. Key date: 8 Nov, Bank of England policy meeting 2 UBS Recommendations Tactical

Foreign Exchange We remain underweight the Japanese yen. The Japanese economy continues to weaken against its peers, leading to rising pressure for the Bank of Japan to engage in further quantitative easing. We have closed our preference for the Canadian dollar following its recent strength, and therefore close ou

ding to market capitalization. Developments in commodity prices affect earnings estimates. Commodity prices Policy action Loose monetary policy by the Bank of England supports equities. Key date: 8 Nov, Bank of England policy meeting 2 UBS Recommendations Tactical (6 months) e The UK offers an attractive 4% di

ment in 2H 2012. Still, economic activity is likely to remain very sluggish despite support from lower oil prices and less rigorous fiscal austerity. The Bank of England may support the UK economy by increasing its amount of bond purchases soon. The probability that the ECB will take further action to support the econ

should profit in the medium term. e Longer-term debt issues and weak competitiveness of major exporters are hurting the Japanese economy. Therefore the Bank of Japan and Ministry of Finance will maintain an expansive policy and continue to try weaken the JPY. However, current positive growth dynamics are supportiv