5 January 2012
Disclosures available on www.cheuvreux.com
Cross Asset Research
2012: US$ Bloc trumps Euro Zone
2012 should be an "entry year" for investment in risk assets.Our focus is the potential for a resumption of the bull marketin risk assets, but probably not before the middleor theSummer of the year.
A degree of rebalancing of growth within the global US$bloc is taking place, allowing a stabilisation of the growthand price regime in America. The US$ is recovering asecurity status, signalling major shifts in international flowsof private and public capital.
The inflationary logic of adjustment in the US$ bloc shouldultimately outweigh the deflationary effects of the euroarea's crisis upon the pricing of financial assets.
The political framework for "EMU II" has been identified. TheFrench Presidential election may determine whether thecommitment of the euro zone to a fiscal union is irreversible.
We reassess our international equity allocation. We areupgrading America and downgrading Emerging Markets/ Japan.
Christopher Potts Nicolas Trémel Elisa Belgacem
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