Epstein Secrets

o worry about US debt FT • Microsoft knocked off its stride by falling profits The Times • Chinese phone call breaks with tradition The Times • Angel Merkel turns on the Japanese The Times • Nokia abandons payout to fund make-or-break year The Times • Merkel: stick with painful reforms The Times • B

ts over Cyprus bailout feed broader fears WSJ • Merkel voice optimism on Europe WSJ • Cyprus rescue wi

grade KNIN VX, -ve NOK1V FH, upgrade TCG LN EFTA00397051 ••• JPM initiate VSVS (ow), upgrade IAG LN, GS downgrade NAUR NO, add FLUG AV to CL buy, BofAML adds BAY GY to Europe list ••• Commerzbank Steel Sector: (downgrade SZG GY & VOE AV), Barclays downgrades FUM1V FH, VER AV, SPM IM & upgrades TEC

n politics. Will Europe follow the route to populism (revolt from the voters) or will we find relief for the markets by the end of 2017 from a Fillon/Merkel duo being in charge of the Euro area’s two largest economies. We think investors will demand a higher risk premium until the French Elections in May

ound 3% in 2017 and 3.5% in 2018. That in turn would mean a more aggressive Fed and in all likelihood a bigger rise in yields and the USD. Chart 15: BofAML sees GDP accelerating into 2018... Chart 16: ...with inflation picking up too m Global GDP growth % m DM GDP growth % m EM GDP growth % m Global CPI

est political risk event for European (and possibly global) equity markets in 2017. By 22 October 2017: German Federal elections Current Chancellor Angela Merkel has announced that she intends to stand for re- election. Current polls have Merkel’s CDU ahead followed by SDP with the euro- sceptic Alternative fu

. That should be the edge you have at looking across the range of asset classes compared to single asset class investors. We would like to thank our BofAML colleagues who have supported our product this year by providing many such ideas and trust they will continue to do so through 2017. Bankof America

ancial markets. Our central case is that centre right President is elected in France (with Francois Fillon now the official Republican candidate) and Merkel is returned at the head of a coalition government in Germany. Chart 19: German polls show a consistent lead for Merkel’s CDU party Chart 20: Fillon