Quagmires & Quandaries · - China's trade surplus $595 billion in 2015, 3.42% of GDP. Total imports...

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Quagmires & Quandaries- uncharted waters for investors and policy-makers

Investor Flows, Macro Trends, Alpha Generation

Samarjit Shankar

BNY Mellon Markets GroupMarch 2016

Managing Director, Head of iFlow & Quant Strategies


─ Economic recovery – remains tentative and uneven; sustainability in doubt

─ Monetary policy divergence amongst major central banks

─ USD strength; Impact on oil/energy prices

─ China slowdown, equity market sell-off, surprise currency devaluation

─ EM economies’ slowdown in general; Weaker demand pressures commodities

─ Volatile start to 2016 amidst broad-based spike in risk aversion

─ Policy-making challenges are mounting in interconnected global markets

─ Global economy still needs synchronous and easy policy – monetary or fiscal?

─ Central banks remain in uncharted waters, maintaining unconventional stimulus measures such as successive QE phases and negative rates

─ Emerging market central banks volte-face – strong capital inflows in 2009-10, outflows in 2011, sporadic buying in 2012-14, very selective 2015, volatile 2016

─ Diminishing returns to QE; Varying impacts of extraordinary measures

─ Investors: crisis of confidence

Real GDP Growth

QUAGMIRE n. [kwag-mahyuh r, kwog-] – noun -> a bog; a situation from which extrication is very difficultQUANDARY n. [kwon-duh-ree, -dree] – noun -> dilemma; a state of perplexity or uncertainty, especially as to what to do

Core Inflation (CPI)

Global fundamentals weak; Policy-making tentative

High Income 1.7US 2.4Euro Area 0.9Japan -0.1

Developing Countries 4.9

China 7.3

India 7.3East Asia and Pacific 6.8Brazil 0.1

WORLD BANK 2013 2014 2015 2016 2017

January 2016 January 2016

1.21.5-0.21.6

7.76.9

3.07.1

5.3

1.62.51.50.8

4.3

6.9

7.36.4-3.7

Advanced Economies 1.4

US 2.2Euro Area -0.5Japan 1.6

Developing Economies 5.0

China 7.3India 7.3ASEAN-5 4.6Brazil 0.1

IMF 2013 2014 2015 2016 2017

1.8

2.4

0.90.0

7.8

6.95.22.7

4.6

1.9

6.97.3

4.7-3.8

2.51.50.6

4.0

2.1

6.37.54.8

-3.5

2.6

1.71.0

4.3

2.1

6.07.55.1

-0.0

2.6

1.70.3

4.7

2.12.71.71.3

4.8

6.7

7.86.3-2.5

2.12.41.70.9

5.3

6.5

7.96.21.4

GLOBAL GROWTH


BOND MARKETS: NEGATIVE RATES, GROWTH/DEFLATION CONCERNS, QE ON/OFF?Risk on/off (more so now), bond yields have fallen steadily; Bank lending remains relatively tight; Eurozone systemic issues linger

Fiscal policies weigh stimulus vs austerity needs amid longer term concerns about sovereign debt sustainability

Developed equity markets recovered, setbacks amid growth concerns, QE-driven liquidity fading, volatility higher

Emerging equity markets had bounced stronger, but relapse has led to investors unwinding exposure and becoming very selective

% move since 1 July 2008: DAX, SPX, NKY % MSCI move since 1 July 2008: LatAm, Asia, E.Europe

Bond 10yr-2yr yield spreads2-yr bond yields in US, Germany, Japan, UK, Canada

EQUITY MARKETS: WEALTH DESTRUCTION, RECOVERY, BUT REMAIN SUSCEPTIBLE


About BNY Mellon’s iFlow® – total assets monitored ~ $35 trillionGlobal Custody: largest in the world at $28.9 trillion, drawn from heritage Mellon & BNY platformsMarket Penetration: Flows relate to sizeable proportion of tradable securities in most markets worldwideObjective - based on tangible and concrete data, not surveys

Timely - investor flows: on a trade-date basis, updated daily; - investor positions: timely updates of monthly shifts (equity, bond and currency portfolios)

Level of Detail - adds invaluable insight into market activity with unparalleled granularity

Comprehensive and Relevant Multi-Asset Perspective - encompassing Equity, Fixed Income & FX markets activity globally

History – Flows data extend back to 20 - 26 years’ history (Equities/Bonds to 1996, FX to 1990)

PERFORMANCE & RISK ANALYTICSMellon Analytical Solutions (formerly Russell/Mellon) & BNY Global Risk Services

• Client relationships represent about $9.6 trillion in assets under measurement• Investor positions vs benchmark (e.g. MSCI EAFE, BarCap Global Agg etc); What are my competitors/peers doing?


May 2013BEFORE AFTER

iFlow: “Uncharted Waters” for both policy-makers & investors


Lehman Brothers bankruptcy

Bear Stearns collapses

Fed’s QE programmeexpanded

The path to Japanese QE

Fed “Tapering” announced

ECB negative deposit rate implemented

Fed rate hike discussion intensifies

Risk aversion returns

iFlow: The greenback’s turning points in recent years


The Commodities Cycle – a precipitous decline; oil prices collapse 2009-10: most emerging markets enjoyed strong recoveries - led to a structural rise in commodities demand; supply responses were slow General USD weakness also kept commodity/energy prices buoyant 2009-12: mining companies expanded capacity and raised annual output – led to a supply cushion 2014: global demand started weakening; oil/energy/commodity prices began a precipitous decline mid-year (USD strength since June; OPEC decision in November) 2015-16: China‘s economy, which dominates demand for commodities has slowed – stalling global growth has removed a major price support 2016: Growth prospects, (over)-supply dynamics. and resilience in emerging markets a key focus this year

JOCIMETL (Journal of Commerce): Steel, Copper, Aluminum, Zinc, Lead, Tin, Nickel

SPGSCI & CRY: Grains, Soft Commodities, Livestock, Energy, Precious Metals,

Industrials

IMF GFSR October 2010 IMF GFSR April 2011


China: 中国经济面临挑战和新不确定因素 Chinese economy faces challenges and new uncertainties (Premier Li Keqiang)“十三五“ 时期，经济发展的显著特征就是进入新常态 New normal would be the major characteristic of the economy in 13th five-year plan (President Xi Jinping)

• Strong equity market sell-off June 2015 onward• Successive bouts of outflows in recent months

• 2015 - GROWTH SLOWDOWN, CAPITAL OUTFLOWS & CNY DEVALUATION • POLICY FOCUS: overcapacity in industries, unproductive investments, credit bubble• FINANCIAL REFORMS: A) Exchange-rate, B) Interest rate, C) Capital Markets

• different speeds to maintain financial stability, “there is a sequence”• FX Markets: bilateral swap deals, trade settlement, offshore yuan centres

CHINA ECONOMY – KEY NUMBERS: - 2015 GDP growth at 6.9%, slowest in 25 years. 2014 GDP growth at 7.4%, slowest in 24 years. 2013 GDP growth at 7.7%, slowest in 14 years. 2012 GDP growth was 7.8% , slowest since 1999, after 9.2% and 10.3% in 2011 and 2010 respectively.

- Average CPI inflation of china in 2015: 1.46%. Average CPI inflation of china in 2014: 2.06% , well below government's target of 3.5%. Inflation in 2013 was 2.6%.

- China's trade surplus $595 billion in 2015, 3.42% of GDP. Total imports dropped 10% for the year, partly due to falling import prices, while exports grew just 1.5%, partly due to the renminbi appreciating 8% in 2015 on a trade-weighted basis.- Foreign exchange reserves fell $512.66 billion in 2015 to $3.33 trillion, biggest drop on record. Nearly 2/3rd of the drop came between August and December, suggesting the scope of the central bank's attempts to stabilize the yuan after its surprise devaluation of the currency on Aug 11 panicked markets; Foreign reserves at end-2014 stood at $3.843 trillion. Foreign reserves at end-2013 stood at $3.382 trillion. The annual increase in 2012 was only about $130bln, the smallest since 2004.

- Current account surplus in 2015 was 2.7% of GDP. Current account surplus in 2014 was 2% of GDP. It was 2.64% of GDP in 2013, slightly above 2.6% of GDP in 2012 which had been the smallest in eight years, down from 10.1% in 2007. An estimated 2/3rd of decline is structural (stronger CNY, labor costs) while 1/3rd is cyclical amid the US/EU drop in demand.

PAST QUOTES: Premier Li Keqiang: It is the quality, not the speed, of growth that matters. “A growth rate under this year's 7.5 percent target is acceptable as long as sufficient employment is ensured, and the government has prepared enough options to respond to any risks and is

capable of maintaining economic growth at a reasonable range” “China’s ability to deliver a medium-high growth of 6.9 percent, solid employment, higher income and savings growth than gross domestic product, and steadily improving

environment last year came as no mean feat,” Li also reaffirmed that China will continue to vigorously pursue structural reform, particularly supply-side structural reforms, which will make it possible for China’s economy to continue growing steadily.”

The new leaderships wishes to maintain policy consistency and continuity China’s changing growth model: President Xi Jinping - reform-minded, keen on shoring up macroeconomic stability. Policy-makers in recent years have made increasing consumption a long-

term strategy, thus lesser export reliance


China – (continued)

• Capital outflows from China a key concern• Policy dilemma – Allow market forces as part of CNY internationalization vs managing the weakening of the local currency• CNY stability is important for global markets sentiment

Impact on Hong Kong --


iFlow: Japan in closer focus amidst heightened risk aversion in global markets • Renewed JPY strength (after decline to 13-year low of

125.60 vs USD in June 2015) fueled by strong risk-aversion, unwinding of carry trades, heightened volatility

• JGBs: Strongest rally in more than a decade, yields at record lows [9 Feb 2016: 10yr (-0.08%), 2yr (-0.247%)]

• Policy measures in recent years:- PM Abe’s “three arrows” program – renewed mandate- 4 Apr 2013: BOJ quantitative easing, targeting inflation- Apr 2014: Sales tax hike outcome worse-than-expected

(next 2% hike to 10% postponed in Oct2015 to Apr2017)- Oct 2014: Second wave of QE announced by BOJ

• Increase base money expansion to about JPY 80 trn per year• Increase annual buying of JGBs by about JPY 30 trn and

extend average duration of holdings to about 10 years• Increase equity allocation by tripling annual purchases of

Nikkei-400 linked ETFs and Japanese REITs to JPY 3.0 trn a year and JPY 90 bln respectively

- 29 Jan 2016: BOJ implements negative interest rates• Fiscal decision: Is it better to achieve primary surplus by

FY2020 and lower public debt burden (nearing 250% of GDP) via faster economic growth, or, a combination of spending cuts and tax hikes?

• Structural reform important as a medium/long-term goal• Risk-aversion fueled safe-haven JGB buying has

generally masked risks from rising debt in recent years• GPIF’s portfolio allocation changes – lower JGB holdings

to 35% from 60%, raise domestic stock holdings to 25% from 12%, raise foreign stocks & bonds holdings to 25% and 15% respectively (almost done at 22% and 14%?)

• JGB bubble? JGB yields near record lowso BOJ: a 1% gain across JGB yields = JPY6.4 trn

in valuation losses• Currency policy has been affected by oil price decline –

policy-makers have had to push back deadline for 2% inflation three times in less than a year

• Global risk-aversion more than off-setting BOJ efforts to weaken the yen (just fighting yen strength for now)

• Coordination and communication amongst global central banks is key in unprecedented times


iFlow: Yield-seekers pause as Eurozone periphery concerns rekindled, ECB policy support? THAT WAS THEN … 2011 THIS IS NOW … 2016


iFlow: US-Eurozone Asset Allocation Cross-Currents and their FX ImpactBONDS EQUITIES FX

Eurozone Courties

Equi ty Index Bloom berg Ticker

2013 Annual % Return

2014 Annual % Return

2015 Annua l % Return

2016 YTD 3/23/16 % Return

Austria ATX 6.05 ‐15.18 10.96 ‐5.40

Belgium BEL20 18.10 12.06 13.97 ‐7.34Finland HEX 26.47 5.74 10.8 ‐6.34France CAC 17.99 ‐1.17 10.17 ‐4.60

Germany DAX 25.48 2.65 9.56 ‐6.70

Greece ASE 28.06 ‐29.80 ‐25.14 ‐12.68Ireland ISEQ 33.64 14.83 31.54 ‐8.48Italy FTSEMIB 16.55 0.23 12.66 ‐13.65Netherlands AEX 17.23 4.93 5.84 0.35Portugal BVLX 15.6 ‐21.19 18.67 ‐1.58Spain IBEX 21.41 3.66 ‐6.2 ‐6.47


• FOMC official statement on 17 September 2015: “"Recent global economic and financial developments may restrain economic activity somewhat and are likely to put further downward pressure on inflation in the near term."

• Yellen on 17 Sep 2015: “We have some concerns about negative impacts from global developments and some tightening of financial conditions.” … “And we have seen in significant outflows of capital from these countries, pressures on their exchange rates and concerns about their performance going forward so a lot of our focus has been on risks around China. But not just China, emerging markets more generally and how they may spill over to the US”

• Yellen on 10 Feb 2016: “Financial conditions in the US have recently become less supportive of growth, with declines in broad measures of equity prices, higher borrowing rates for riskier borrowers, and a further appreciation of the dollar” … “These developments, if they prove persistent, could weigh on the outlook for economic activity and the labor market.”

• Possible scenarios to watch out for: Stronger Dollar, Subdued Oil Prices, China/EM, Eurozone systemic issues, Geo-politics, Markets Turmoil• 16 March 2016: Dovish FOMC statement; Fed dot-plot revision; Paring of Fed’s median projection for 2016 rate hikes to two from four

The US Economy & the Fed’s monetary policy – balancing act, critical juncture

Source for FOMC and Janet Yellen quotes on this page: Bloomberg and other press articles

ISM Mfg & Non-Mfg; Consumer Confidence Home Sales: Existing and New Non-farm Payrolls & Unemployment Rate


iFlow: Diminishing Returns to QE … FX idiosyncrasies …

Brexit risk

DIM

INIS

HIN

G R

ETU

RN

S T

O Q

E


iFlow: Commodity-linked markets’ allure faded in 2015; selectivity is key; fresh buying• AUD bore the brunt of negativity in 2014 – China linkages, weak domestic fundamentals, surprise rate cut; glass half-full now, fresh AUD inflows, is the easing cycle done?• NZD relatively buoyed by hawkish central bank in 2015H1, rate cuts in H2, OCR at 2.5% as RBNZ balances very low inflation with asset price strength; policy uncertainty• CAD firmly on defensive given oil linkage, recession in 2015H1, rate cuts in 2015, growth surprise in Dec, fiscal stimulus planned, fresh equity flows supporting CAD

AUDCAD


20Mar12-1June12

Global Investors: More Tactical Than Strategic

24Aug10 - 6Apr11

7Apr11 -30Sept11

1Oct11 -19Mar12 24Aug10 – 6Apr11 7Apr11- 24July12

AUD/JPY EUR/JPY

2June12-10Apr13 25July12 - 31Dec1311Apr13-7Sept158Sept15-1Jan16

iFlow HEATMAP Eurozone Bond Flows

PAST THREE MONTHS

iFlow HEATMAP Eurozone Bond Flows

PAST TWO YEARS

1Jan14 - 20Apr15 21Apr15-20Oct15

21Oct15-29Feb16


EM currencies – thirst for yield and low rates in mature markets continue to fuel tactical plays in select EM FX– asset market flows play an important role

High Yielding Emerging Markets Currencies vs USD

High Yielding Emerging Markets Benchmark Rates


Asia: traditionally resilient, saw outflows in 2014-15, but remains a strategic favorite

Asia FX Reserves: strong growth has withered

Asia: price pressures are subdued

• Favorable growth prospects and QE-fueled liquidity led to strong equity inflows since March 2009• Growth moderation concerns since 2014 have slowed exports, especially to Eurozone and lately to China• Slower capital inflows, some outflows, hence slower FX reserves growth … and some depletion in a strong-USD environment• Asia still well-placed, need to fuel domestic demand & regional trade• Disinflationary winds argue for lower rates and weaker FX• Will ECB & BOJ QE efforts and China stability boost Asia asset market inflows and help rebuild FX reserves?


Asian and other EM central banks: FX Interventions volte-face over the years• 2010-2012: Significant amount of portfolio capital inflows gave way to capital outflows. FX interventions in 2010-11 to smooth local currency appreciation; but abrupt turn-

around in 2011H2 and 2012H1 as EM central banks looked to limit currency downside, which made imports costlier, fueling inflation. Objectives: Rein in volatility, stem currency downside, prevent disorderly declines, stabilize domestic markets

• (2010, 2011H1) - Various measures adopted to deter flood of inflows Brazil: tripled tax to 6% on foreigners investing in debt securities; South Korea: audit of lenders handling foreign currency derivatives

• (2011H2, 2012H1) - Variety of measures to limit capital outflows Brazil: currency swap auctions to support BRL; Russia: central bank sold USD to slow RUB depreciation; Turkey: changed required reserves lenders could keep in

FCY to free up cash; India: curbed trading in INR derivatives; cut export income amount kept in FCY; Poland: sold FCY to support PLN• Private capital inflows to emerging markets surged to over $1 trillion in 2010. Inflows to emerging markets hit a record of $1.35 trillion in 2013 and declined to $1.1 trillion in

in 2014, Emerging markets suffered record net outflows of $732 billion in 2015 – (source: Institute of International Finance).• May 2013: Fed “tapering” – the BRL, INR, IDR, ZAR, TRY weakened against the dollar, and some of these governments quickly intervened in their FX markets. Indonesia

and Turkey tapped into their reserves and hiked interest rates. Brazil removed the 6% tax in June 2013, takes away a key barrier Brazil had raised to prevent the real from strengthening too much and hurt local industries and exporters, and then removed the 1% tax charged on bets against the dollar in the futures market, in order to help ease the fall of real. In August 2013, Brazil introduced a $60 billion currency swap and repurchase program that provided access to dollars and reversed the slide of the real –(source: Council on Foreign Relations Editors’ Paper and various newswires).

• 2015 – Outflows/Inflows, Volatility in EM, High Selectivity• August 2015: market turbulence after China’s surprise CNY devaluation. Kazakhstan and Vietnam abandoned the peg to the dollar, and currencies in countries such as

Nigeria and Venezuela were considered riskier for further downside. China instituted a restriction on forward currency bets and suspended applications for certain outbound investments. Saudi Arabia told banks to stop allowing traders to short Saudi's currency, the riyal. Nigeria recently halted imports of goods and imposed spending limits on credit and debit cards denominated in foreign currency. Azerbaijan said it would slap a 20% tax on any transaction that takes money out of the country. India, Venezuela and Egypt also have applied some form of capital controls – (source: Council on Foreign Relations Editors’ Paper and various newswires).

• September-October 2015: Brazil's central bank in September 2015 announced plans to double the value of its daily intervention in the currency markets in order to halt the BRL’s slide; Malaysia announced in September 2015 that the government would inject USD 4.6 billion into the Malaysian stock market via state-owned investment funds in order to restore investor confidence and counter the MYR’s weakening; Bank Indonesia started to intervene in the Forwards Market to help stabilize the IDR.

• NOW (2016): Mexico surprise rate hike to deter speculators, LatAm rate hikes, China measures to stabilize yuan, EM policy-makers trying to manage risk-aversion impact

iFLOW FEATURED IN IMF GFSR REPORT OCT 2010:

In response to increased foreign inflows, policymakers in a number of countries have introduced a variety of measures. For instance, authorities in Brazil, Indonesia, and Korea introduced measures to mitigate the impact of strong capital flows on domestic macroeconomic and financial stability – precisely in countries where the BNY Mellon iFlowsm data found foreign equity inflows had become especially persistent. The measures in these countries might have changed the overall composition of capital inflows, but they have not as yet significantly reduced the persistence of equity inflows.


iFlow® Insights: India, Malaysia• 2016-17: GDP Growth target 7.0-7.5%, fiscal consolidation (deficit at 3.5% of GDP, lowest since 2008), monetary accommodation (room for more rate cuts)• RBI Governor Rajan – Macroeconomic stability is India “single most important strength” during global markets turmoil; Fin Min Jaitley – “decided that prudence lies in adhering to fiscal targets”• Structural reform, Policy liberalization, Infrastructure spending – positive sentiment for local asset markets; iFlow shows renewed buying by global portfolio managers

• Risks: accelerating inflation, low oil prices, slower GDP growth (4.0-4.5% in 2016) • Positives: Budget recalibration (spending cut offsets lower oil revenue), fiscal consolidation, Ringgit & FX reserves stabilized since Sep 2015 despite oil price decline, Current account surplus• Fitch Ratings re-affirms Malaysia at ‘A-’ with stable outlook; MYR weakness in 2015H2 has helped non-commodity exports; Renewed institutional investor interest in local asset markets• iFlow shows fresh purchases of local equities in recent weeks as global investors avail of better entry levels after the index sold off in 2015


iFlow® Insights: South Korea, Indonesia• KRW has sold off amid steep export decline (worst vs USD in Asia in Jan-Feb), reached five year low in February• Even so, BOK forecasts 3% growth in 2016 after 2.6% growth in 2015, even as ‘risks’ to economic growth path have increased’• Improvement in short-term external debt position• Local equities have been sold (weighing on KRW) concerns about economic slowdown and China exposure; Local bonds rally (10-yr yield at record low) given rate cut expectations

• IDR has been bought since the central bank intervened in Oct 2015, some renewed outflows in recent weeks amid global risk-off environment.• Government GDP target is a healthy 5.3% for 2016• On-target inflation leaves room for rate cuts this year, which is buoying investor demand for local equities and bonds, which in turn is IDR-supportive• In general, South-East Asian currencies (IDR, MYR, PHP, THB) have been more resilient than their North Asian peers


iFlow: Institutional Investors in Emerging MarketsiFlow featured in the International Monetary Fund’s Global Financial Stability Report, April 2014


iFlow Weekly: 15 April 2015

COMMENTARYIn an environment that persists with accommodative central bank policies leading to low rates, ongoing rate cuts and suppressed bond yields in general, global investors continue to seek higher yielding investment opportunities. While tactical trading abounds as market participants follow the ebb and flow of data releases and policy-maker comments, recent months have also seen the more strategic institutional investors favoring relatively oversold and undervalued asset markets on a selective basis.

One particular example that readers will recall is how iFlow highlighted the turnaround in the fortunes of the beleaguered Russian ruble – back in December when USD/RUB was approaching the 70 level, we began seeing a sizeable pick-up in Russian equity inflows. As Chart 1 shows, these equity purchases have been sustained through 2015Q1 making Russian equity indices some of the best-performing indices across emerging markets – the MICEX index is up more than 20% year-to-date in USD terms. As we have often pointed out, based on our iFlow historical data, global equity managers tend to leave their currency exposure un-hedged, which leads to equity flows having an impact on local currencies. Not surprisingly, recent equity inflows have played a large part in the recovery of the ruble (see Chart 2), with USD/RUB now having broken below the 50 level today for the first time since last November.

In a similar vein, we draw our readers’ attention to Brazil, where a turn in investor sentiment has become evident in recent weeks as local asset markets are being viewed as another investment opportunity by institutional investors.

As Chart 3 shows, equity managers remained largely on the sidelines in the run-up to Brazil’s presidential election last year. While a brief spurt of buying began just before Christmas, our iFlow cumulative chart shows inflows picked up in earnest in early March this year. This has been consistent with price action, as the benchmark Bovespa index has gained more than 20% in just a month since mid-March. Once again, Chart 4 illustrates how sustained equity inflows have contributed to supporting the local currency, with USD/BRL having drifted lower below 3.05 at present from levels above 3.30 in mid-March.

Indeed, in Section 2, readers will note that our iFlow quantitative models initiated a long-BRL signal on 17 March, a position that has performed well thus far.

CONTINUED ON NEXT PAGE


iFlow Weekly: 29 April 2015

COMMENTARYEven as Greek negotiations approach yet another eleventh hour (we covered this topic in last week’s iFlow analysis), this week we look at emerging equity markets, especially China. But first, a quick note on Eurozone bond markets.

As Chart 1 shows, our cumulative iFlow indicators show how the significant pick-up in the buying of German bunds started in January 2014 and the strong inflows thereafter drove the 10-year yield to record lows this year from levels close to 2% 16 months ago. Since the beginning of 2015, however, iFlow has signposted the distinct slowdown in these inflows and even periods of net selling, the latest bout of which is ongoing (see Chart 2 where the 1mma of these German bund flows has turned south of late). German yields at record lows, with shorter tenors at sub-zero levels, have led to some profit-taking – this, combined with nascent signs of price pressures have led to a sell-off today, with the 10-year bund yield spiking to a six-week high of 0.29%. We will monitor these flows to determine whether this might presage a sustained turnaround in sentiment, especially given Greece’s travails (Charts 3 and 4 confirm Greek and Portuguese debt outflows of late).

Emerging markets equities continue to be buoyant. The MSCI Emerging Markets Index rose to a seven-month high this week. Even as the Fed has tapered its QE program, ongoing QE by the ECB and BOJ continues to fuel liquidity which is seeking higher yields in emerging markets. However, our iFlow analysis is putting up a red flag on China. Chart 5 shows how iFlow indicators have signposted the Chinese equity rally since mid-2014 – indeed, the stock market has gained over 90% in the past six months with the Shanghai Composite index reaching a seven-year high this week. The latest gains have been driven by expectations of more reforms for state-owned enterprises, and speculation of further monetary easing and stimulus as policy-makers aim to shore up growth. The China effect has also spilled over to Hong Kong given the linkages between the two stock-markets as retail investors join the herd. What is worrying is that institutional investors covered by iFlow appear to have started taking profits (Charts 5 and 6) even as retail funds have been buying in recent months. Whether these nascent outflows are sustained is important to track as China is a key factor for investor sentiment, and the exits can get very crowded if there is a spike in risk aversion. We continue to monitor this via iFlow. Stay tuned! ([email protected])


iFlow Weekly: 8 July 2015COMMENTARYWe focus on Greece and China this week – while investors have seemingly become inured of the former’s travails, our iFlow indicators reflect initial signs of contagion from the Chinese equity sell-off amidst heightened risk aversion.

Greece first. The witching hour has passed and we still don’t have a resolution – the victory of the “no” vote in last Sunday’s Greek referendum has led to yet more last-ditch efforts this week to salvage an accord between the country’s leaders and creditors. The next deadline is midnight Thursday in Brussels by which time Greece needs to present an economic reform proposal in exchange for a new bailout – the leaders of all 28 European Union countries will then meet on Sunday 12 July to make a decision in response to Greece’s proposal, while the ECB will meet the next day to decide next steps.

Chart 1 shows the 1mma of our iFlow Greece bond flow indicator remains firmly southbound as it has been since 19 June, consistent with the 10-year Greek yield reaching 19.58% earlier today from a 10% handle just two weeks ago. Charts 2, 3 and 4 show that global portfolio managers’ paring of exposure to Spanish and Portuguese debt instruments has not been severe in recent weeks, while Italian bonds have attracted modest net inflows of late – this is entirely consistent with the back-up in yields in these countries not having been as pronounced as in Greece. Perhaps this is what has led to a harder stance by Greece’s creditors as they realize the consequences of a potential Grexit may not be too disastrous for the rest of Europe –indeed, European leaders are now talking openly about this possible outcome as they prepare to isolate its impact.

We now turn to China where global contagion risks from the ongoing stock-market sell-off appear greater than from Greece. The Shanghai Composite index has lost 31% over the past month. More worryingly, Wednesday saw trading halted in at least 1331 companies on mainland exchanges and another 747 companies’ share prices falling by the 10% daily limit. All told, sellers were locked out of more than 70% of the Chinese market. While authorities have taken several measures in recent days to shore up the market, investor confidence has rapidly deteriorated.

Chart 5 shows the big picture iFlow story of strong cumulative inflows into Chinese equities over the past two years. Interestingly, Chart 6 focuses on 2015YTD with theCONTINUED ON NEXT PAGE


iFlow Weekly 8 July 2015 (continued)CONTINUED FROM PREVIOUS PAGE3mma of our iFlow China equity indicator illustrating how global portfolio managers have been taking profits on their China exposure in recent months. Foreign investors have been selling Shanghai shares at a record pace – Monday and Tuesday alone saw CNY 23.7 billion worth of sales through the Hong Kong-Shanghai exchange, the most since the program began last November. Yet, current market conditions have turned very illiquid, and investors not being able to sell their holdings will understate net outflows. We will monitor Chinese flows closely for our readers to get as accurate a read as possible via iFlow.

For now, it is evident that China’s troubles (as investors fret about a hard-landing) are spilling over into other emerging asset markets, commodity-related FX, and the equity asset class as a whole. For example, Chart 7 shows fresh net selling of the Brazilian real, while Charts 8 and 9 show accelerating outflows from the Russian ruble and Chilean peso – all-commodity-related currencies. Chart 10 shows the Indian rupee has also been on the back-foot of late. Perhaps it is no coincidence that Tuesday saw BRICS policy-makers finalize a $100 billion pool of foreign reserves to aid each other in times of illiquidity.

Even amongst G-10, commodity-linked exposure such as the Australian dollar has now been out of favor in recent weeks (Chart 11), while outflows from the New Zealand dollar continue apace (Chart 12). Elsewhere amongst emerging markets, our iFlow MXN FX indicator posted a -200 reading yesterday (Chart 13), which means net selling twice as strong as average flows over the past year. As Chart 14 confirms, the acceleration of MXN cumulative outflows is in keeping with the general trend we are observing in other riskier asset and currency markets.

Even as investors await the end-game in Greece which will determine whether the country remains a part of the Euro or not, the sell-off in Chinese equities is becoming an increasingly important determinant of global investor sentiment. The resulting rise in risk aversion and higher volatility continue to drive safe-haven trades.

In particular, there have been renewed steady inflows into the Swiss franc in recent weeks, a trend that has coincided with the Swiss National Bank admitting to intervening in the FX markets last month – as Chart 15 shows, the 3mma of our iFlow CHF FX has been on the rise once again, much as it was during 2014H2 which led to the SNB scrapping its 1.20 EUR/CHF line in the sand in January this year. Further, we continue to witness elevated buying interest in US Treasuries (Chart 16), consistent with the 10-year UST yield falling below 2.20% yesterday from levels close to 2.50% in the last week of June. This decline in yields could intensify if asset allocators move decisively away from equities in the coming weeks. Needless to say, we will keep our readers posted with how global investor activity unfolds in what is a very fluid situation for risk and investor activity.([email protected])


iFlow Weekly: 20 August 2015COMMENTARYThis week, we turn to FX flows in emerging markets, where most currencies have retreated of late amidst a spike in risk aversion.

Chart 1 shows cumulative FX flows in Asia over the past two months. Clearly, the Chinese renminbi stands out with the strongest net outflows – the CNY devaluation on 11 August was unexpected and has intensified pressure across EM currencies as investors fret again about the sustainability of global growth. Chart 2 shows CNY flows in sharper relief – the 1mma of our iFlow CNY FX indicator began heading south in late July and investors have remained net sellers of both the local currency and equities (see Section 3) in recent sessions.

Following the CNY devaluation last week, the past few days have seen several EM currencies losing ground including the 23% plunge in the Kazakhstan tengetoday once policy-makers decided to abandon the peg and allow the KZT to float freely. Charts 3 and 4 show net outflows from the Malaysian ringgit and Thai baht, consistent with these two currencies having been amongst the heaviest losers vs the greenback in recent months. In a similar vein in Latin America, Charts 5 and 6 show net outflows from the Chilean peso and Brazilian real in recent weeks.

That we are witnessing most EM currencies lose ground vs the greenback despite the DXY Dollar Index having drifted lower in August thus far (as the Federal Reserve becomes more tentative about a tentative September rate hike), is entirely understandable given our iFlow observations of portfolio managers reducing exposure to riskier assets in their equity and fixed income portfolios.

However, the USD’s slight retreat thus far this month may only prove to be a temporary reprieve as, all said and done, the US Fed still remains the most likely to begin normalizing rates the soonest amongst G-4 central banks, even though the trigger might not be pulled until next year. Given the general fragility of global growth and investor sentiment, the race to the bottom in global currency markets is likely to pick up again with renewed vigor – in fact, one could argue we may already be in the midst of another round of competitive devaluations. EM central banks that have, in general, had to dip into their FX reserves to defend their currencies in recent months may decide the effort to fight the tide may be futile.

In such an environment, we will be closely monitoring underlying asset market flows via our iFlow indicators – these would be key differentiating factors for investors to consider in terms of currency impact if the tide of risk appetite continues to ebb. ([email protected])

iFlow: Cumulative FX Flows in Asia


iFlow Weekly: 21 January 2016COMMENTARYAs global risk aversion intensifies, we focus this week on select currency and asset markets that have borne the brunt of investor pessimism, and those that are reflecting a flight to relative safety.

Concerns about China remain a key driver of investor sentiment. As Charts 1 shows, our iFlow China equity indicator reached -350 yesterday (net selling 3.5 times stronger than average flows in Chinese equities over the past year). Further, this reflects renewed strong outflows after a brief hiatus from the heavy selling witnessed during Sep-Nov last year – evidently, equity investors who had been holding out, waiting for a recovery amidst the government’s measures aimed at market stabilization, have started capitulating. Chart 2 confirms that capital outflows, especially from the local equity market, continue to fuel net selling of the renminbi, a trend that was initiated in the immediate aftermath of the CNY devaluation in August 2015.

Heightened China-related worries continue to spill over into Hong Kong markets. Charts 3 and 4 show the 1mma and cumulative flows of our iFlow Hong Kong equity indicator remaining firmly southbound for now, consistent with the Hang Seng index having lost 15.4% year-to-date and strong capital outflows fueling concerns about the HKD currency peg. Global equities in general have also been hard hit of late – Chart 5 shows steady outflows from US equities in recent months, consistent with the S&P 500 having had its worst start to a new year since the financial crisis.

Against this backdrop, it is not at all surprising to see increasing net inflows into relative safe-havens such as the Japanese yen and US Treasuries. Our iFlowJPY FX indicator in Chart 6 is reflecting increased net purchases in recent sessions culminating in a spike to +273 yesterday – the net inflow being nearly three times stronger than average flows over the past year. In fact, the 1mma of our iFlow JPY FX indicator in Chart 7, which has tracked USD/JPY well, confirms the momentum of the latest inflows is the highest in a year as investors unwind riskier exposure at an increasingly rapid pace. This has led USD/JPY to dip below 115 yesterday from levels above 123 just last month. We make a similar observation in Chart 8 – the 1mma of our iFlow US bond indicator has risen rapidly in recent weeks as cross-border investors have sought relative safety and liquidity, which in turn has led the 10-year UST yield to dip below 1.95% yesterday.

Ongoing concerns about China, oil, global growth and deflationary pressures are likely to remain an important determinant of investor risk appetite going forward. Today’s comments by ECB president Mario Draghi led to optimism about the potential for further monetary stimulus. Whether this translates to concrete steps by major central banks to soothe frayed investor nerves remains to be seen. ([email protected])


iFlow Weekly: 3 February 2016COMMENTARYOur iFlow charts for major currency and asset markets are relaying a clear message that global investors remain risk averse as they closely monitor evolving policy measures by major central banks.

In general, cross-border portfolio managers are now factoring in a prolonged period of monetary accommodation, not least due to the surprise Bank of Japan measures last week that marked their first foray into the realm of negative rates. As a result of the BOJ’s move and mounting macro concerns about slowing global growth and deflationary pressures, investor expectations of another round of monetary stimulus by the ECB at its March meeting have risen, fueled also by recent data and policy-maker comments about the need to do more. Against this backdrop, global bond yields continue to plummet as the whirling eddy of low/negative rates drags yields toward record lows in major markets.

The corollary to all this is a growing belief that the Fed will find it difficult to press ahead with US rate normalization near-term. Unsurprisingly therefore, Chart 1 illustrates how within US fixed income, the sharp uptick in the 1mma of our iFlow US bond indicator confirms the spike in safe-haven flows into especially US Treasuries. This is consistent with the rapid decline in the benchmark 10-year UST yield to below 1.80% this morning (sub-par data such as today’s weak ISM non-mfg index have also helped) from levels above 2.25% at the beginning of this year. Similarly, the 1mma of our iFlowGerman bond flow indicator (Chart 2 was featured in our write-up last week) continues to capture steady safe-haven inflows, consistent with the 2-year bund yield falling below -0.50% for the first time and posting yet another record low this morning.

One consequence of the paring of Fed rate hike expectations of late is weaker support for the US dollar (Chart 3). Further, the ongoing US equity market sell-off (part of a global decline) is weighing on the greenback as global investors take profits and money back home – across markets in general, the largely un-hedged nature of equity flows weighs on the local currency (Charts 4 and 5 illustrate this for the US in recent weeks). To complete the circle, as our readers would be familiar with, iFlow has been signposting asset allocation switches away from US equities and into US bonds since last year. Charts 1 and 4 confirm this trend continues apace. Combine all this and the DXY’s precipitous decline today becomes understandable.

Meanwhile, yet another oft-used indicator of risk aversion is re-asserting itself – as Chart 6 shows, although the BOJ’s surprise rate move on 29 January has led to our iFlow JPY FX indicator posting three consecutive outflows, the pace of this net selling remains anemic. Chart 7 confirms the upswing in the 1mma of our iFlow JPY FX indicator has only a minor dent for now. Aided by the USD’s renewed weakness, USD/JPY is now lower than where it was last Thursday, as investors continue to unwind riskier exposure at an increasingly rapid pace. Amidst all these cross-currents, will the greenback’s retreat offer beleaguered commodity and emerging markets a reprieve? Stay tuned! ([email protected])


iFlow Weekly: 11 February 2016COMMENTARYKey barometers of risk aversion, which our iFlow indicators began signposting in mid-December, have intensified even further over the past week. De-risking remains the main driver of investor activity in global markets across asset classes.

Global stocks remain firmly on the back-foot while bond yields in safe-haven markets head lower. In the US, this asset allocation switch, in play for the past year (Charts 1 and 2 showing cumulative US stock and bond flows respectively), has intensified of late with equity investors taking profits on their US holdings and cross-border investors buying more safe-haven US Treasuries in recent months.

Essentially, we are now in the throes of a crisis of confidence amidst mounting investor concerns about the efficacy of central bank policies aimed at reflating economies and battling deflationary pressures. A key recent example has been the Bank of Japan’s surprise cut in deposit rates into negative territory two weeks ago aimed at weakening the local currency. However, iFlow indicators continue to show strong inflows into the Japanese yen and JGBs (see Charts 3 and 4), consistent with USD/JPY now lower than before the BOJ move and the 10-yr JGB yield having gone negative for the first time – as we have been writing, both the yen and JGBs are attracting safe-haven flows as riskier exposures are unwound aggressively.

In a similar vein, we are seeing strong net buying of German bunds continue apace (see Charts 5 and 6). In the Eurozone, new fissures are coming to the forefront and further fueling risk aversion – for example, flatter yield curves impacting bank profitability and rising costs of insuring corporate bonds. Systemic concerns about the banking sector are mounting as European central banks delve further into a negative rate regime (Sweden cut further this week, and the ECB is widely expected to act similarly as it increases monetary stimulus at its next meeting in March). Against this backdrop, it is interesting to note that even the Swiss franc, which has been lackluster vs the Euro and USD since the SNB abandoned its 1.20 level in EUR/CHF ‘line in the sand’ in January 2015, is beginning to strengthen (Charts 7 and 8 confirm most of the impetus is coming from fresh inflows into CHF-denominated debt ahead of an ECB meeting where Mr Draghi is expected to announce more easing).

Amidst all these cross-currents, the greenback’s retreat, which our iFlow charts have also highlighted, remains in place not least due to Ms Yellen’s dovish testimony this week. While this offers beleaguered commodity and emerging markets a small reprieve, it does not help the BOJ’s efforts to stem JPY strength. If the strong pace of yen buying persists, Japanese policy-makers may have to consider stronger measures than verbal intervention to introduce two-way FX risks in an environment where investors remain firmly risk-averse.([email protected])


iFlow Weekly: 18 February 2016COMMENTARYThe global market turmoil has been prevalent since the beginning of the year, and risk-aversion has been the major driver of market sentiment. The steep drop of global equity markets brought down many stock indices to levels not seen in years. In the past week or so, commodity markets have got some relief from the selling pressure on news that oil producers are making efforts to stabilize oil prices. Recent headlines about Iran supporting the decision taken by OPEC and non-OPEC countries to keep the production ceiling so as to stabilize oil prices, has further buoyed market sentiment. Accordingly, we have seen a return of risk appetite in the past several days. Investors have been buying equities that were very strongly sold off during the risk-off environment. As a result, key equity markets have begun to bounce back in recent sessions.

Indeed, our iFlow data are showing some interesting changes. Below are select markets that reflect this turn of events:

Japan: the 1mma of our iFlow equity indicator shows that stocks have been bought recently, consistent with the Nikkei index’s rally (Chart 1). Interestingly, we have also observed that the safe-haven JGBs have been sold lately (Chart 2), indicating that investors may be moving from bond markets into the equity markets.

Mexico: we saw equities have been bought since mid-January when the MEXBOL index touched a one-year low (Chart 3). And not surprisingly, we also saw MXN has been bought since mid-January (Chart 4). The surprising rake hike by Banxico at Wednesday’s extraordinary meeting has also given MXN a boost .

Brazil: we saw equity buying interest emerge since January when the IBOV index tumbled to a six-year low (Chart 5). We also saw BRL has been modestly bought since January (Chart 6).

South Africa: we saw equity buying interest emerge since January when the JALSH index dropped to a two-year low (Chart 7). We have also seen that ZAR has been modestly bought since January (Chart 8).

India: we saw equities have been bought since late-January (Chart 9) when the SENSEX index dropped to a 20-month low. We also saw INR has been bought since late-January (Chart 10).

In sum, investors appear to have viewed the recent drop of equity markets and local currencies as opportunities to get back in at more attractive levels. Whether this is sustained remains to be seen. Will the risk-on sentiment continue going forward? We will keep monitoring developments in global markets via iFlowand keep our readers posted. ([email protected])


iFlow Weekly: 17 March 2016COMMENTARYThis week, we turn our attention to the Eurozone to gauge the impact of the latest ECB measures, via our iFlow indicators, on the region's bond, equity and currency markets. Also, we examine the impact of the BOJ and Fed policy meetings held earlier this week. In general, the past two weeks’ meetings of major central banks have yielded dovish comments from the US Federal Reserve, while the ECB and BOJ continue efforts to rekindle growth and fight deflationary pressures via quantitative easing and negative deposit rates. Against this backdrop, risk assets have rebounded slightly.

In the Eurozone, while the region's equities have been net bought on balance since February (Chart 1 - likely due to expectations of more easing), the aftermath of the March ECB meeting has seen this trend weaken slightly since last week. In a similar vein, while the EUR has been net sold on balance since February (Chart 2) on prospects of more easing in March, the pace of outflows has decelerated since last week. Both these observations are perhaps not surprising given that even though the ECB expanded its QE effort and delved further into negative rate territory, Mr Draghi's "forward guidance" was not as supportive as market participants would have liked. Meanwhile, Eurozone fixed income instruments continue to be net bought (Chart 3) -- a closer look reveals an interesting change in recent sessions, in that we are now seeing more forays into the riskier peripheral bond markets as risk aversion has retreated slightly.

A key reason for this slight pullback in risk aversion has been an expectation in the run-up to yesterday's Fed meeting that the FOMC statement would be dovish (as a result of which the USD has been net sold in recent weeks - Chart 4). This was indeed borne out, plus the Fed's scaled-back path for its planned rate normalization has led to a sharp decline in the US dollar today.

Therein lies the paradox. While a dovish Fed is the need of the hour to mitigate monetary policy divergence and to bring calm to volatile markets and spooked investors, the resulting weakness of the greenback the past two days has led to a strengthening of both the Euro and yen to 1.13 and 111 handles respectively vs USD -- negating efforts by the ECB and BOJ to keep their currencies weak.

The retreat of the US dollar has been the key driver for a rebound in risk. Oil and commodity prices have ticked up and related exposure is being sought. In particular, we are seeing global investors continue with their forays into higher yielding currencies such as the Mexican peso and South African rand (Charts 5 and 6). We will focus on emerging asset markets next week -- while beleaguered EM currencies have gotten some respite from a weaker dollar, market forces and flows across FX and asset classes have created more challenges for the ECB and BOJ. ([email protected])


iFlow Weekly: 24 March 2016COMMENTARYThis week, we focus on the key pivot in the US dollar’s fortunes – recent sessions have seen a steady recovery by the greenback, which in turn has impacted global investor sentiment and the nascent rally in riskier assets. As Chart 1 shows, the 1mma of our iFlow USD FX indicator turned north two weeks ago, while Chart 2 confirms rising USD inflows over the past week, consistent with the DXY (ICE) Dollar Index’s up-tick to a 96 handle from a nine-month low of 94.578 last Thursday (in the immediate aftermath of a dovish FOMC statement and the paring of the Fed’s median projection for 2016 rate hikes to two from four).

A key catalyst for the US dollar’s continued ascent has been a succession of hawkish comments from Fed speakers earlier this week, including San Francisco Fed President John Williams, Atlanta Fed President Dennis Lockhart, Chicago Fed President Charles Evans and St. Louis Fed President James Bullard. More worryingly, the back and forth in recent days amongst the FOMC statement, dot-plots revision and subsequent Fed speak, has served to remind investors that policy uncertainty is here to stay. Meanwhile, the ECB’s and BOJ’s struggles have shown that major central banks continue to navigate uncharted waters with unorthodox monetary policy tools that have becoming blunt and ineffective in a complex macroeconomic environment.

As a result of the greenback’s renewed ascendancy, continuing policy challenges and ongoing uncertainties about whether extraordinary efforts to rekindle growth and fight deflationary pressures will succeed, we are witnessing a pause in the risk rally that we had signposted in recent iFlow commentaries. Charts 3-5, 6-8, 9-11 and 12-14 illustrate how our iFlow indicators across FX, bonds and equities for Brazil, Turkey, South Africa and Mexico respectively have reflected a combination of decelerating inflows and accelerating outflows over the past week.

Against this backdrop, it is not at all surprising that two of our four main barometers of global risk aversion continue to attract net inflows. In particular, Chart 15 shows how the 1mma of our iFlow JPY FX indicator remains elevated after having risen strongly since last December – an environment in which the Bank of Japan found it difficult to swim against the tide as it attempted to stem yen strength by introducing negative deposit rates in late January. Meanwhile, Chart 16 confirms JGBs remain strongly sought amidst a combination of investors transacting cross-currency swaps and unwinding risky exposure.

In sum, the big-picture macro backdrop of global risk aversion has not changed much since the turn of the year, as a result of which we expect cross-border portfolio managers to remain cautious and any forays into risk to remain tactical and selective. ([email protected])


Monetary Policy Divergence

Stronger USD

Oil/Commodity Prices Lower

JUN 2014

OPEC/Saudi decision to maintain outputNOV 2014China economic slowdown

JUN 2015

AUG 2015

China equity sell-off

CNY devaluation

Weaker imports demand

Capital outflows, CNY weaker

EM economies slower

VolatilityDe-risking

Global asset marketsLiquidity

EM currencies weaker

Fed Rate Hike vs ECB, BOJ

iFlow: Signposting Spirals & Sequels …

DEC 2015 OPEC abandons targets

POLICY DILEMMAS

DEC 20152016 UPHEAVAL

Growth & Deflation Challenges

Policy challenges


RISK-ON/OFF? DECISIONS, DECISIONS, DECISIONS!!!

AusterityGrowth

DeflationInflation

Glass half-fullGlass half-empty

Developed MarketsEmerging markets

GrowthRecession

BondsEquities

QEQE exitDoves/Hawks

Monetary/Fiscal mix

iFlow®: Investors face challenging decisions – as do policy-makers!• Divergence & Dilemmas: G-20 summit in Shanghai (26-27 Feb)

• Diminishing Returns to QE and Negative Rates (side-effects)

• Monetary policy at the end of its tether.

• Alternatives include -- Fiscal Policy and Structural Reform

• Indecision and uncertainty amongst policy-makers has not inspired confidence

• Investor risk appetite remains tentative and is still subject to the ebb and flow of evolving policy-maker comments and data releases

• Less strategic decisions, more tactical forays on the part of investment managers

• The traditional herd mentality has given way to high selectivity and investment decisions subject to nimble shifts in allocations


iFlow Daily E-Mail as of 19Feb2016Interesting Juncture for Investment Decisions• Relative Valuations: equities sell-off an opportunity; bonds in favor for much longer?• Bouts of risk aversion – focus on Fed policy, China, Europe, Japan, macro challenges• USD backdrop cross-currents as ECB, BOJ conduct QE – impact on EM• G-24 emerging markets now face volatile capital flows, more regional bets• Select EM asset markets offer attractive strategic opportunities• Mainly tactical bets for now – excess cash to be deployed long-term once dust settles • QE: Spirals and Sequels• Currencies: The Race to the Bottom Continues – will tensions renew?• Markets: Connectivity, Correlations and Contagion• Policies: Divergence and Dilemmas• Investors: Greater Risks, Lower Returns


iFlow® iQ Quant Models:Strategic & Tactical Allocations/Trading

Ideas

Portfolio Flows

Deviationsfrom Benchmark

Strategic

Tactical

Strategic

Tactical

KEY 2016 FOCUS ON WHETHER INVESTORS1. Remain risk-averse or make forays into riskier exposure2. Further adjust asset allocations 3. Become even more selective

P&RA (formerly MAS/Russell Mellon)

• ASSET MIX• COUNTRY & SECTOR

ALLOCATIONS

iFlow®:


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Quagmires & Quandaries · - China's trade surplus $595 billion in 2015, 3.42% of GDP. Total imports...

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Transcript of Quagmires & Quandaries · - China's trade surplus $595 billion in 2015, 3.42% of GDP. Total imports...