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e trends, starts others In the three weeks since Donald Trump’s election victory global markets have seen some dr

Global Cross Asset Strategy —- Year Ahead Bankof America The Trump inflection ape ce Investment Strategy 30 November 2016 Corrected Key takeaways ee « Market response to Trump is logical but moves have been frontlo

am Page for Full List of Contributors 10Y real rates. CNH a hedge vs trade risk. Trump extends some trends, starts others In the three weeks since Donald Trump’s election victory global markets have seen some dramatic moves. Som1e of those moves are extending trends that had already started — higher yields, hi

can but also want to protect ourselves from a further surge in the USD and rates. We diversify our equity long in EM and European yield with a long Nikkei position. It is not the best entry point but we suspect it has further to run on a one year horizon. A stronger USD is good for Japanese equities whe

(Chart 3). This is also in line with the global rotation expected by Michael Hartnett (The Flow Show: The Inflation Era Begins 10 November 2016). 3) Nikkei winner of steeper UST and strong macro In a scenario of strong external demand and US rate hikes (particularly with curve steepening), Japan equitie

ics, diplomacy and US economic cycle The biggest risk to our scenario is the implications for Japan’s diplomatic and geopolitical environment of the Donald Trump presidency in the US. The likelihood of agreement on the TPP (Trans-Pacific Partnership) has already declined and been priced into the market, but an

ser to Europe under such a scenario, raising the incentive to sign the Japan-EU EPA (Economic Partner Agreement), positive for related stocks. If the Trump presidency tips the US towards isolationism, we expect Japan’s spending on defense to increase. If this results in higher spending on Japan’s Self De

see USDJPY reaching 120 next year and Japanese reflation, bullish for Japanese equities, particularly the banks. Huge focus on Banks/Financials post Trump election, they're the big winners. The Banking sector is the main beneficiary of higher rates/less regulation overhang. Investors are still underwe

(Chart 3). This is also in line with the global rotation expected by Michael Hartnett (The Flow Show: The Inflation Era Begins 10 November 2016). 3) Nikkei winner of steeper UST and strong macro In a scenario of strong external demand and US rate hikes (particularly with curve steepening), Japan equitie

ate Finance The NASDAQ OMX Group FBC Group Ltd Bloomberg News The New York Times Liberty Global Inc. Colliers International Nihon Keizai Shimbun (Nikkei) NHK (Japan Broadcasting Corporation) Think Tank SophiaBank The Monitor Group Will Seed Co. Ltd Nomura International Plc First International Resou

ni Adi B. Godrej Jamshyd N. Godrej Daniel Goffart Donald J. Gogel Rick Goings Ayla Géksel Yair Goldfinger l