Lyxor Asset Management today releases the latest research from its Cross Asset Research Team, entitled Secular Stagnation Trumped – US Rates Gearing Up.

Authored by Lionel Melin Senior Strategist and Jeanne Asseraf-Bitton Global Head of Cross Asset Research, the attached paper reveals that ‘Trumponomics’ could leave secular stagnation in the past.

The Lyxor Cross Asset Research team found that:

·         Although the new US administration’s reforms are underway, US real rates remain depressed, pricing-in little growth acceleration

·         Weak growth is already priced in, with accommodative policies that pressure yields lower potentially remaining in place  

·         By year end, US 10 year yield is expected to exceed 3% owing to wage pressures accelerating and secondly President Trump’s fiscally active and protectionist platform which should boost price pressures

·         US growth expectations ought to continue being revised with Lyxor predicting growth at 2.5%, thanks to macro leading indicators showing that activity is already picking up ahead of reform implementation

·         Potential debt ceiling brinkmanship is an impending issue pushes Lyxor to recommend a slight underweight position on US government bonds

Take a look at the paper here.