The "CAM" provides up-to-date asset information on commodities, currencies, government bonds/rates, emerging markets, credit, equity and financial institutions, in addition to reviewing our Cross Asset Model Portfolio.
Executive Summary: Curb Your Enthusiasm
The current path of muddling through is likely to be supportive, but the same and possibly new risks will re-emerge.
Commodities: Fiscal Cliff Stalls Momentum
The U.S. fiscal cliff remains the main near-term risk to commodity prices, although we believe much of the hit to consumption has been priced in.
Currencies: Lower EZ Risks, Diverging Outlooks
The reduction of eurozone-related tail risks leave more room for differentiation based on idiosyncratic factors.
Government Bonds/Rates: New Goals
Poor growth prospects and a fiscal cliff of uncertain size will keep bond yields from rising.
Emerging Markets: New Hope Needs Reality Check
Both EM local currency and external debt are set to perform well in a less risk-averse environment.
Credit: Spreads Will Reach New Postcrisis Lows
Investor behavior will itself provide the impetus for stability and lower yields and spreads, more so than changes in fundamentals.
Equity: A Year of Cyclical Divergence
In a scarce growth environment, we expect markets to focus on cyclical divergences.
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