The US and China will play the role of lead locomotives, H2. We will not see the "hard landing" in China that many expect. The US will do quite fine, shut of Fed and administration meddling.
Our spread (S) US 10yr, (L) Ger bund from -4 (last +19) reflects our insight that US vigor will eclipse that of the EU. Today’s ECB brake is one reason why.
The UK will move sideways.
A full EU meltdown remains a wild card (20%), as does armed Iranian / Saudi conflict (15%).
Robert Craven
Thursday, July 7, 2011
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