File 023717

Images

Text

From: jeffrey E. [jeeyacation@gmail.com]
Sent: 11/14/2016 3:34:18 PM
To: Thomas Jr., Landon
Subject: Re: EUROPEAN MULTI ASSET COVERAGE MEETING IMPRESSIONS: Eyes on Real Money outflows; Christmas comes
early for most of macro players, hedge funds. Absolute majority bet on HRC to win, but majority still made good
money because ....
thx
On Mon, Nov 14, 2016 at 10:32 AM, Thomas Jr., Landon < > wrote:
The latest thinking from London hedge fund crowd
----------Forwarded message----------
From: Ozan Tarman
Date: Mon, Nov 14, 2016 at 9:40 AM
Subject: EUROPEAN MULTI ASSET COVERAGE MEETING IMPRESSIONS: Eyes on Real Money
outflows; Christmas comes early for most of macro players, hedge funds. Absolute majority bet on HRC to
win, but majority still made good money because....
To:
Classification: Public
EUROPEAN MULTI ASSET COVERAGE MEETING IMPRESSIONS: Eyes on Real Money outflows;
Christmas comes early for most of macro players, hedge funds. Absolute majority bet on HRC to win, but
majority still made good money because Hillary bets worked as Trump trades.
Wider, steeper core rates, stronger USD, weaker EM is the Rage. The last one, EM, is the big loser out of
Trump Reflation Theme. DM over EM and divergence within DM are very much in vogue. All gains of EMBI
since March are gone!
For Rates & FX, it does feel like early days of Taper Tantrum trade of 3 years ago. Both dominated by US
price action. In both, hedge funds have now caught the moves, play offense & ride the Trump narrative. Real
Money is on the ropes, caught long Fixed Income/duration/carry and cannot play defense fearing Outflows.
In Emerging Markets, most outflows are retail, ETF driven. All eyes on next leg of institutions. In equities,
banks big winners; FANGs losing. I asked partners 2 questions. 1) Would the "this will be great for business,
feel good factor" wave out-run "if real yields go up, equities are a sell" fear. Clients are torn, but the former,
bullish camp wins for now, my colleagues suggest. There are skeptics though.
2) In Europe, do fears over Renzi losing & Le Pen winning climb over the big momentum behind banks etc.
Again, my equity team suggests, "no, reflation wave may win over Italy referendum anxiety„ for now." Renzi
is now widely expected to lose, so a "yes" would be the big surprise trade. And the bigger elephant in the room
is Le Pen. If she wins in May, Europe as we know it may really shake.. But for now this is more in the radars
of Euro & EBG traders.
Core rates are driven by the speed of TY sell-off. And in G5 FX, the big driver is USD/JPY. The stronger "we
should believe in Trump reflation narrative" winds are, the more USD/JPY buyers we see.
Some in Research warn that Trump may succeed in "tax cuts, faster than any infrastructure spending," but few
macro are in mood to listen. A few players believe, looking at trade weights of each with US and magnitude of
HOUSE OVERSIGHT 023717
sell-off, Asia FX may have more weakness to come than MXN. Will copper/infrastructure rally eventually
help Chile?
Most macro love NKY, willing to love it more. Bringing it home; fast macro money players are rushing to
erase losses, year long pains through wider rates, longer USD, weaker EM, stronger equities.
Real Money is in defensive, remembering Taper Tantrum days, fearing institutional outflows & forced selling
of carry hope positions.
Those who want to "fade" Trump rally, seek valuation in EM, believe core rates can tighten to get a breather
are in Minority.
This material was prepared by a Sales or Trading function within Deutsche Bank AG or one of its affiliates
(collectively "Deutsche Bank"), and was not produced, reviewed or edited by the Research Department. Any
opinions expressed herein may differ from the opinions expressed by other Deutsche Bank departments
including the Research Department. This material is intended for your personal use and Deutsche Bank is not
soliciting the purchase or sale of any security or transaction, or participation in any particular trading strategy.
This material, and the information contained therein, does not constitute the provision of investment advice.
Sales and Trading functions are subject to additional potential conflicts of interest which the Research
Department does not face. Deutsche Bank may engage in transactions in a manner inconsistent with the views
discussed herein. Deutsche Bank trades or may trade as principal in the instruments (or related derivatives),
and may have proprietary positions in the instruments (or related derivatives) discussed herein. Deutsche Bank
may make a market in the instruments (or related derivatives) discussed herein. Sales and Trading personnel
are compensated in part based on the volume of transactions effected by them. Assumptions, estimates and
opinions expressed constitute the author's judgment as of the date of this material and are subject to change
without notice. Past performance is not necessarily indicative of future results. This material is based upon
information that Deutsche Bank considers reliable as of the date hereof, but Deutsche Bank does not represent
that it is accurate and complete. Certain transactions or securities mentioned herein, including derivative
products, give rise to substantial risk, including currency and volatility risk, and are not suitable for all
investors. Deutsche Bank transacts business with counterparties on an arm's length basis and on the
assumption that each counterparty is sophisticated and capable of independently evaluating the merits and risks
of each transaction and that the counterparty is making an independent decision regarding any transaction.
This e-mail may contain confidential and/or privileged information. If you are not the intended recipient (or
have received this e-mail in error) please notify the sender immediately and delete this e-mail. Any
unauthorized copying, disclosure or distribution of the material in this e-mail is strictly forbidden.
Please refer to https://www.db.com/disclosures for additional corporate and regulatory EU disclosures and to
http://www.db.com/unitedkingdom/content/privacy.htm for information about privacy.
Landon Thomas, Jr.
Financial Reporter
New York Times
HOUSE OVERSIGHT 023718
http://topics.nytimes.com/top/reference/timestopics/people/t/landon jr thomas/index.
html
please note
The information contained in this communication is
confidential, may be attorney-client privileged, may
constitute inside information, and is intended only for
the use of the addressee. It is the property of
JEE
Unauthorized use, disclosure or copying of this
communication or any part thereof is strictly prohibited
and may be unlawful. If you have received this
communication in error, please notify us immediately by
return e-mail or by e-mail to jeevacation@gmail.com, and
destroy this communication and all copies thereof,
including all attachments. copyright -all rights reserved
HOUSE OVERSIGHT 023719