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Raphaël Gallardo

Investment & Client Solutions Strategist

Metals and yield curve: the red and the black

25.09.2017 - Raphaël Gallardo

Read market analysis by Raphaël Gallardo, Multi-asset strategist at Investment and Client Solutions investment division.

- World growth close to 4%, but the slowdown in credit flows in the US/Europe/China, along with quantitative tightening from central banks, point to a turnaround in this trend in 2018.

- Weak dollar and yield curve steering moves by the Bank of Japan drive risk appetite via carry and put-writing strategies.

- Strong recovery in the dollar from 4Q onwards, fuelled by renewed pressure on currency swap spreads: US banks’ liquidity is poised to be caught in the crossfire as the Treasury bolsters its reserves and the Fed’s makes passive moves to shrink its balance sheet. A strong dollar will dent equity market valuations.

- Regardless of who Trump appoints to the Fed, the balance sheet unwind strategy seems to be viewed as having no currency impact. The rest of the world is short by $10.7 trillion, so a surge in the dollar could spark a dangerous short squeeze.

- More details on the ECB’s tapering plans after the elections in Germany. Peripheral spreads will hinge on whether the FDP has a place in the forthcoming coalition government. Still an underweight stance on the Bund.

 

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Raphael Gallardo graduated from the Ecole Nationale Supérieure des Mines de Paris, civil engineering course.

Raphael Gallardo began his career as a financial Engineer at Paribas in 1997, before joining the Economic Research division of BNP Paribas in 1999 and the Asset Management in 2005. In 2007, he became a Chief Economist at Axa IM.

He joined Natixis Asset Management in 2013 as an Investment & Client Solutions Strategist.