The long USD trade continues to be the talk du jour. It has rallied around 10% vs. the EUR and 5% to 8% vs. other developed and emerging market currencies since July this year.  This trade has not only been driven by the differing interest rate prospects across the respective regions, but also by better economic growth seen in the US relatively. The September FOMC statement showed that the Committe had not changed its forward guidance...

Since 2011, most of the Equity market rally has come alongside with falling bond yields, and defensive equities have outperformed. However the rally of the last three months has not been led by defensives, but by cyclical sectors. US cyclical and consumer cyclical growth sectors have outperformed vs. defensive sectors. Not surprising given how strong the US data has been over this period especially after the q1’14 weather related slump....

In the middle of March the market violently derated Commodities and China exposed stocks on shadow banking concerns and fears of further unwind of financing deals. Then Premier Li sprayed some fairy dust with his magic wand when he said the government will do whatever it takes to support growth. Even though the announcement was limited to railway construction projects and tax relief reforms, not pure stimulus per se, the markets took relief and...