Goldman Sachs' Top Ten Themes for 2018:
1. Global Growth: Stable and Synchronized
2. DM Monetary Policy: No Motive for Murder
3. Drawdown Risk: Bear-Market Warning Signs
4. Emerging Markets: More Room for Growth
5. China: A Well-Managed Slowdown
6. Global FX: Soggy Dollar
7. US Policy Risks: If It Rains It May Pour
8. Bond Term Premia: Gradual Normalization
9. European Risk: Preparing for a Post-Draghi Euro area
10. Late-Cycle Imbalances: Illiquidity Is the New Leverage
And their top trades:
1. Position for more Fed hikes and a rebuild of term premium by shorting 10-year US Treasuries.
2. Go long EUR/JPY for continued rotation around a flat Dollar.
3. Go long the EM growth cycle via the MSCI EM stock market index.
4. Go long inflation risk premium in the Euro area via EUR 5-year 5-year forward inflation.
5. Position for 'early vs. late' cycle in EM vs the US by going long the EMBI Global Index against short the US High Yield iBoxx Index.
6. Own diversifed Asian growth, and the hedge interest rate risk via FX relative value (Long INR, IDR, KRW vs. short SGD and JPY).
7. Go long the global growth and non-oil commodity beta through long BRL, CLP, PEN vs. short USD.
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More ... on Friday I posted:
