Adam Button of ForexLive.com shares a list from Barclays outlining the top ten macroeconomic themes to watch for, including recommendations for the top forex currency pairs to play in 2015.
Barclays is out with a note highlighting 10 macroeconomic themes it believes will drive trading in 2015. It’s pretty much a recap of every other consensus call.
- Theme 1: The Fed will lift off in 2015—(UST) curve flatteners and short gold.
- Theme 2: Policy divergence = Persistent US dollar strength—short EUR/USD; long US small-caps (Russell 2000) versus large-caps (S&P 500) and short S&P 500 versus nonUS DM equities.
- Theme 3: Lower oil prices: the negative implications are priced in, the positive ones less so—long consumer discretionary stocks and Korean stocks.
- Theme 4: The Bank of Japan’s surprise—long Japanese equities (large-caps), currency hedged, and 10y inflation swaps.
- Theme 5: Europe is priced for the Japan scenario, but the ECB can change that—long peripheral equities versus bonds (volatility adjusted); Receive EUR 5/10/30s butterfly; short EUR FX.
- Theme 6: Broad negativity on global growth/China could be a good opportunity in 2015—long EM equities that benefit from US growth, low oil prices, and China easing (Korea, China, and India); long global cyclical versus defensives stocks.
- Theme 7: Four headwinds for EM in 2015, but a few opportunities as well—long Indonesia, India, and Mexico local bonds and long USD versus CZK, HUF, and PLN.
- Theme 8: A good environment for EUR-funded FX carry—short EUR/IDR, short EUR/INR, and short EUR/BRL.
- Theme 9: Long India assets: the big story in EM—long equities, bonds, and INR (versus EUR).
- Theme 10: What are the big consensus risks for 2015?—long short-dated US rates vol; long basket of INR, BRL, and TRY versus USD; long European equities versus US equities; long EM equities versus US equities; pay 10y JPY via option.
By Adam Button, Editor, ForexLive.com
