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Trend 5: Crude Oil – Saudi Arabia’s Strategic Misstep

Investment Outlook – Trend 5, Published Mar 16, 2017

A momentous shift in the crude Global Order occurred in 2016. With Saudi Arabia losing its stronghold on crude Oil pricing, our long-term view on crude remains range bound, as shale oil looks set to come on. A Third Momentous Shift in the Global Order The strategy of over production to drop prices and drive…

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Trend 4: Awakening of the Commodity Bull

Investment Outlook – Trend 4, Published Mar 16, 2017

Commodities exited a painful bout of demand and supply rationalisation last year. Going forward, China and Trump’s fiscal stimulus will remain drivers of incremental demand. The Boom (2002–2008) Commodity cycles generally peak when high prices foster greater production and lower demand, eventually leading to a surplus that puts downward pressure on prices. The 2002-08 cycle…

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Trend 3: Quantitative Reversal–River Flows Reverse and a Shift from Monetary to Fiscal

Investment Outlook – Trend 3, Published Mar 16, 2017

Decade-long flows into the U.S., a secular bond bull run and massive liquidity surges are now reversing. The River Flow Analogy Several flows have been at play over the past two decades in suppressing U.S. bond yields. Flow number one was the flood of money the Chinese deposited in the U.S. treasuries, choosing not to…

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Trend 2 : Expensive Developed Vs. Nervous Emerging Markets, Where is the Opportunity?

Investment Outlook – Trend 2, Published Mar 16, 2017

While developed markets have outperformed emerging markets recently, they are richly valued and are increasingly regressing in terms of fiscal stability. Developed Markets have Outperformed EMs for 6 Years… Emerging markets have underperformed developed markets by nearly 50% in U.S dollar terms, and coming on almost six years since April 2011. The outperformance has been…

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