From Reflation to Inflation February 12th 2021
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From Reflation to Inflation February 12th 2021
The 2020 Journey
• Start of 2020 – World was set to recover from the “trade war years”.
Portfolio positioning was for a world of moderate economic growth.
• Coronavirus Pandemic: We decided that this was not the great
depression but a bridge to a more inflationary world.
• Performance recovered strongly towards the end of the year as the
World started to look post Covid and our contrarian view of a more
inflationary world started to become more mainstream.
2
The Battle of 2020
Deflationary Shock Versus Inflationary Response
3
Big shocks can change Markets for decades
• Global Financial Crisis • Post Pandemic
▪ Austerity • Austerity is Dead
▪ Money Supply didn’t reach main • Focus is on getting money to main street
street
▪ Asset bubbles favoured Wall • Different assets will work for the next
Street decade
▪ Low Inflation • Inflation is being encouraged
▪ US Dominance • US Dominance is under threat
4
The Bull Markets of the last decade may be over:
16000
14000
Deflation Assets:
12000
❑ Government Bonds
10000 ❑ US Investment Grade
❑ US High Yield
❑
8000
S+P 500
6000 ❑ US Growth Stocks
❑ US Consumer Discretionary
4000 Stocks
2000
Inflation Assets:
0
01/01/1996
01/01/2008
01/01/2010
01/01/1980
01/01/1981
01/01/1982
01/01/1983
01/01/1984
01/01/1985
01/01/1986
01/01/1987
01/01/1988
01/01/1989
01/01/1990
01/01/1991
01/01/1992
01/01/1993
01/01/1994
01/01/1995
01/01/1997
01/01/1998
01/01/1999
01/01/2000
01/01/2001
01/01/2002
01/01/2003
01/01/2004
01/01/2005
01/01/2006
01/01/2007
01/01/2009
01/01/2011
01/01/2012
01/01/2013
01/01/2014
01/01/2015
01/01/2016
01/01/2017
01/01/2018
01/01/2019
01/01/2020
❑ Commodities
❑ Real Estate
Appian Inflationary Basket Appian Disinflationary Basket ❑ TIPS
❑ Equities in World ex US
Source: Refinitiv Datastream 1/12/2020 ❑ US Banks
❑ Value
New Ones will Emerge ❑ Cash
5
Could this unravel the biggest Bubble of all: Passive Management?
➢ Passive has meant
buying more Fixed
Income, more
Growth Equities
and more US
exposure.
➢ The remaining
active managers
are free to seize
Source: Moneycube 1/12/2020
the opportunities
6
COVID likely to mark bottom in Yields after 40 year Bull Market:
Source: Refinitiv Datastream 1/12/2020
7Beginning of Multi Year Trend?
MSCI Growth Versus MSCI Value since 2000
Plenty of opportunity left for Switch back into Value
Source: Refinitiv Datastream 1/12/2020
8Multi Asset Funds are Performing:
3 Month Performance November to January
9Equity Funds are Performing:
3 Month Performance November to January
10How We View Todays Investment World
➢ In an inflationary world, 0 is not protection of capital.
➢ Capital cannot be protected trough traditional fixed income buffers
➢ The race for safety has meant that the “safe assets” are now the most risky.
➢ Valuations matter and the starting valuations today for fixed income and US equities make
them risky.
➢ Illiquid assets are attractive to some due to correlation benefits but are not a panacea.
➢ Risk is the permanent loss of capital.
➢ An investment process focused on long term investments, quality assets and sensible
valuations.
11Polite Notice Re GDPR Requirements
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would rather not please let us know on the contact details
providedwilliam.mcdonald@appianasset.ie
+353 (1) 6623982
john.flavin@appianasset.ie
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ian.naughton@appianasset.ie
+353 (1) 6623986
sean.breheny@appianasset.ie
+353 (87) 1806784
patrick.lawless@appianasset.ie
+353 (1) 6623001Disclaimer
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14From reflation to inflation
February 2021
Julien Garran
+44 207 627 0635
Julien@macrostrategy.co.uk
15Risk & regime change
This presentation argues that the current regime change in the US and in the global policy mix, from
anti-inflationary monetary dominance over the past 40 years, to pro-inflationary fiscal dominance and
monetary accommodation, will rewire the concept of risk in global financial markets.
Over the past 40 years, monetary and fiscal policy tightening into a recovery choked off US$ flows offshore,
and left markets largely in a disinflationary boom during the expansion, with a risk of a deflationary bust if
liquidity tightened excessively. The fundamental implication of the current policy regime change is that it will
drive sustained trade and financial flows offshore though the cycle. This means that markets will spend most
of the time in the top half of the MacroStrategy investment clock. The opportunity to trade a sustained
reflationary boom has emerged, but so has a new risk; inflation.
Capital Flows Investment theme Investment clock
Miners,
Large XS credit commods
Large XS credit Zone 1 Zone 2 Ind commods
While wages EM stocks
Capital flows Reflationary Inflationary But not miners
are accelerating Short 10yr,
into EM boom bust Short treasuries
Induces inflation Short US$
Credit Shortfall Small XS Credit Short US stocks Tech, Pharma,
US spreads No more flows Zone 4 Zone 3 Short High yield Biotech,
widen. Deflationary Disinflationary
into EM Long gold Long US$
Deflation bust boom Long 10yr Long 10yr
follows.
16
Sources; The MacroStrategy PartnershipDollar flows are the key to global reflation #1
• Dollar flows from the US offshore, that fund the supply chains that feed global trade, are the key driver of global
reflation.
• There are two types; capital/financial flows, and trade flows.
• The reason dollar flows are critical is that there are two US$ economies.
The second US$ economy, in US$trn
12
10 Offshore
US$
8
denominated
credit
6
Weighted
4 basket
peg Bank
2 loans
Full peg
0
US$ cash circulating abroad Pegged currencies US$ liabilities held offshore
Sources; BIS, The MacroStrategy Partnership
17Dollar flows are the key to global reflation #2
• We use our global excess dollar liquidity indicator as a signal for the incentive for capital to flow out of the US.
30
Excess global US$ money supply, 6m ann, %
25
Debt ceiling raised
20 QE1
QE2 Reflationary
15
10
5
Now
0
-5
-10 Fed tapers
-15
Shanghai Treasury draws down
-20
Deflationary accord deposits at Fed
Sources; The MacroStrategy Partnership
18Inflation in the next cycle?
No one thing causes inflation. Instead, inflationary eras describe a self-reinforcing process
combining major supply shocks, government driven demand shocks, and a Fed that is prepared to
accommodate both with easy money. And it is the interaction of those forces with consumers’,
workers’ and producers’ psychology that drives inflation.
These factors are starting to fall into place. In ‘The road to inflation’ I highlight the ‘Seven Supply Shocks’
that are currently impacting the global economy; asset prices, oil, the end of Moore’s law, monopoly, green
policies, deglobalisation, and a deteriorating human & physical capital stock. The four demand shocks are;
a global consensus towards across-the-cycle fiscal stimulus, rising militarisation and a growing welfare &
dependency culture and now the lockdowns.
The elephant chart; global income growth, 1988-2008
90 Income growth Global high
80 '88-08, % income earners
see strong growth
70
60
50
40 The decline of the
The rise of the emerging developed world
30
middle class, especially China middle class
20
10
0
-10
0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90 95 100
Poorest Percentile of world income distribution Richest
19
Sources; The MacroStrategy Partnership, Bloomberg.Towards fiscal dominance #1
In preparation for this piece, the author read all the Fed speeches since the covid crisis began last
February, with a particular focus on the Fed’s long-term monetary policy review. For his sins, he also sat
through the three hours of Yellen’s confirmation hearings.
The central theme that emerges is labour market hysteresis; the persistent positive effect from
temporarily high levels of employment, in that it raises skill levels, employability, confidence and self-
worth and in that it benefits the previously economically side-lined; racial minorities, women, the young and
the old. It raises productivity over the medium term, raising all living standards.
Hysteresis is also the persistent negative effect of temporarily high
unemployment, reducing skill levels, employability, self-worth etc, hurting the
economically marginalised and lowering medium- as well as long-term productivity.
This thinking has come directly from Yellen herself.
Yellen and her husband, George Akerlof, have written papers on these issues
(see 1986). Yellen gave speeches on it while at the Fed (see post crisis). Fed
staffers deepened that research with a focus on minority groups (see
Minneapolis).
This author suspects that this is the central driving force behind Yellen’s public
service. Her identification of employment hysteresis is in her view the single
Source; Google opensource most important objective of policy makers.
20Towards fiscal dominance #2
• The global fiscal authorities were already in expansionary mood ahead of covid.
• The US fiscal deficit is headed for the high teens in 2021, with deficits close to 10% through Biden’s
first term.
US budget deficit plus Treasury net lending, US$bn
0
-500
-1000
-1500
-2000
US budget decicit Enhanced stage five fiscal stimulus
-2500
-3000
Issuance to cover Treasury net lending Green New deal
-3500
-4000
-4500
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021f 2022f 2023f 2024f
Source; US Treasury, The MacroStrategy Partnership 21US current account deficit to grow and remain large
• Professor Wynne Godley’s dynamic sector balances framework is a very useful tool to help predict the direction of the US
current account deficit.
• With consumer & government saving set to fall sharply in the coming months, and with double digit deficits possible
through the cycle, we are set to see a profound increase in the CA deficit.
The sector imbalances framework US personal savings (US$bn ann,
SA)
Change in 7000
consumer savings
+ 6000
5000
Change in
government savings 4000
+ Change in 3000
2000
corporate savings
1000
= 0
01/01/10
01/10/10
01/07/11
01/04/12
01/01/13
01/10/13
01/07/14
01/04/15
01/01/16
01/10/16
01/07/17
01/04/18
01/01/19
01/10/19
01/07/20
Change in trade
deficit
Sources; Bloomberg 22US current account deficit to grow and remain large #2
• The US current account deficit shrank from 2012-15, chocking off trade flows overseas as the shale boom, and decling
bank lending hit imports.
• The decline in shale oil production will exacerbate the deficit going forward, while we expect strong bank lending to
support the deficit.
• The deficit is set to more than double in the coming months and years, boosting aggregate demand offshore, and
supplying funding to support global trade.
US trade balance, % GDP, 3m rolling
-1.0
-1.5
-2.0
-2.5
-3.0
-3.5
-4.0
-4.5
-5.0
-5.5
-6.0
?
01/05/00
01/08/14
01/02/01
01/11/01
01/08/02
01/05/03
01/02/04
01/11/04
01/08/05
01/05/06
01/02/07
01/11/07
01/08/08
01/05/09
01/02/10
01/11/10
01/08/11
01/05/12
01/02/13
01/11/13
01/05/15
01/02/16
01/11/16
01/08/17
01/05/18
01/02/19
01/11/19
01/08/20
Sources; Bloomberg
23Towards monetary accommodation #1
The top three Fed officials, ranked in terms of their order of importance of market
communication; Powell, Clarida and Brainard, have all fallen into line with Yellen.
Jerome Powell, May 13th, 2020
‘Fiscal policy is needed to prevent a structural underperformance effect (hysteresis) from a
recession and a slow recovery’.
‘the robust job market was delivering life-changing gains for many individuals,
families, and communities, particularly in the lower end of the income spectrum. In
addition, many who had been left behind for too long were finding jobs, benefitting
their families and communities, and increasing the productive capacity of the
economy’.
Lael Brainard - July 14th, 2020
‘With inflation exhibiting low sensitivity to labour market tightness, policy should not pre-emptively
withdraw support based on a historically steeper Phillips curve that is not currently in evidence’.
‘Refraining from ‘lift-off’ until inflation reaches 2% would lead to modest temporary overshooting,
which would help offset the previous underperformance (of inflation)’.
‘Given the downside risks to the outlook, there may come a time when it is helpful to reinforce the
credibility of forward guidance and lessen the burden on the balance sheet with the addition of
targets on the short-to-medium end of the yield curve’.
Source; Google opensource
24The battle for money supply
US money supply growth to potential nominal growth ratio
14
• Money supply needs to grow at 5% or above
12
to induce capital outflows.
10
• Fed QE is running at US$1.4trn.
8
Induces reflationary capital • The drawdown in the Treasury cash balance
outflows
6 was delayed, but a US$820bn drawdown is
4 ? planned by end March, with a further
2 US$300bn in Q2. On an annualised basis, this
0 will accelerate the impact of QE x5 in
-2 Feb/March and x2 in Q2.
1/12/96
1/10/07
1/6/90
1/7/91
1/8/92
1/9/93
1/10/94
1/11/95
1/1/98
1/2/99
1/3/00
1/4/01
1/5/02
1/6/03
1/7/04
1/8/05
1/9/06
1/11/08
1/12/09
1/1/11
1/2/12
1/3/13
1/4/14
1/5/15
1/6/16
1/7/17
1/8/18
1/9/19
1/10/20
• Bank lending has slowed, but is set to
accelerate into the recovery.
US Treasury deposits at the Fed, US$m • Money supply is due to rise 3x neutral in 2021.
2000
1800 US bank loan growth, 6 week ann %,
1600 Withdraws 80
1400 liquidity from Adds liquidity 6 week change in bank loan assets, ann
70
1200 the system to the system 60
1000 50
800 40
600 30
400 20
200 10
0 0
-10
-20
Sources; The MacroStrategy Partnership, Bloomberg
25Monetary subservience
In my view there are four key differences that distinguish the coming cycle from the broadly disinflationary era from 1982-2019. All of
them are inflationary. First, the Fed intends to accommodate above target inflation this cycle. Even prior to the crisis, Lael Brainard,
Clarida and Powell all stated that the Fed would accommodate core PCE inflation running above 2% in the last cycle, in order to get the
average core PCE to 2% across the cycle, so to anchor inflation expectations at around that level (See Brainard).
They missed that completely. And now the world is in recession, it is likely that core PCE will run well below 2% in the short term.
Assuming that core PCE is well below 2% for the next 18 months, I calculate that the Fed would have to accommodate inflation running
at 4.1% in the three years from 2022-4, double the supposed target, to get core inflation back up to 2% on average for the previous 15
years. I fully expect the Fed to accommodate, or run easy money, in the face of rising and above target inflation this cycle. That is a
complete break from the last 40 years, where the Fed consistently promoted credit expansion and then raised rates in anticipation of
inflation that generally never arrived.
The Fed needs 4.1% core PCE
US Core PCE, % 2022-2024
5 to raise 15-year
av to 2%
4
Target
3 Forecast
2
1
0
01/03/09
01/10/09
01/02/12
01/09/12
01/04/13
01/11/13
01/08/15
01/03/16
01/10/16
01/05/17
01/02/19
01/09/19
01/04/20
01/11/20
01/03/23
01/10/23
01/05/24
01/12/24
01/05/10
01/12/10
01/07/11
01/06/14
01/01/15
01/12/17
01/07/18
01/06/21
01/01/22
01/08/22
Source; The MacroStrategy Partnership, Bloomberg.
.
26Post covid?
This author was wrong in his call in the late summer 2020 that there would be an
‘echo bounce’ in covid cases, hospitalisations, and deaths in the developed world
over the pending Northern Hemisphere winter, peaking out at around a third of
deaths at the pandemic peak. Instead, hospitalisations and deaths broadly repeated
the experience of early 2020. The reason for the error was that your author had
followed the experience of a normal flu pandemic. But this pandemic started late;
instead of emerging in the Northern hemisphere in October/November and peaking Estimated number of people in the UK with covid symptoms.
in early January, the first wave emerged in February and peaked in early April.
The way this author thinks about herd immunity now is that there is a different level
of herd immunity depending on the time of the year. So, the Northern Hemisphere hit
herd immunity in April 2020 and as it got warmer through the summer, people
became less susceptible. But when we re-entered a particularly cold Northern
Hemisphere winter, a broader portion of the population became subject to infection.
Had the first wave come at the normal seasonal flu time, we’d have had a much
bigger first wave and a smaller second wave. As it was, the late timing of the first
wave evened the two events out.
But now, it appears that we have hit herd immunity again in the heart of the Northern
Source; Kings college estimates.
Hemisphere winter. The most rigorous data in the UK; the Kings College infection .
estimates based on the Zoe App, shows that current infections are down 48% since
January 11th. Similar results are visible across many American states and more
gradually in Europe. The interesting thing about this is that the decline is too early to
reflect much of vaccine roll-out, given that vaccines are typically thought to provide
immunity after a 10–20-day lag.
27Can we ‘moneyball’ China in the 2020s?
China oil demand per capita vs income per capita India oil demand per capita vs
11.0 income per capita
10.0
Oil demand p/c 4.0 Oil demand p/c In the film ‘Moneyball’, Billy Beane, the cash constrained
9.0
3.8 manager of the Oakland A’s baseball team, has just lost his
3.6
8.0 3.4
three best players. He sets out to replace them ‘in the
Indonesia 3.2 aggregate’, choosing cheap and unconventional substitutes that
7.0
3.0
6.0 2.8
collectively get on base about the same. After a tough start, the
5.0 2.6 team goes on an extraordinary winning streak.
2.4
4.0 India
Income p/c, US$k 2.2 Income p/c, US$k
3.0 2.0 Could we recreate China’s commodity intense growth boom in
0 2 4 6 8 10 12 0 0.5 1 1.5 2 2.5 the 2000s with three countries in the 2020s?’. With India,
Indonesia, and with a more mature version of China itself, this
China, India & Indonesia contribution to growth of top 20 note argues we can.
30% world economies
China India Indonesia
Economies tend to start their most capital and commodity
20%
intensive growth phases (rising up their s-curves) when they
have reached around 35% urbanisation and urban incomes are
10%
heading towards US$5k per person. India is at the starting line,
and Indonesia is halfway up. And it is precisely when the global
US$ trade and capital flows form a major tailwind for emerging
0%
markets, as we are now starting to see, that we tend to witness
these ‘tipping points’ in EM progress and development.
-10% 01/01/16
01/01/94
01/01/95
01/01/96
01/01/97
01/01/98
01/01/99
01/01/00
01/01/01
01/01/02
01/01/03
01/01/04
01/01/05
01/01/06
01/01/07
01/01/08
01/01/09
01/01/10
01/01/11
01/01/12
01/01/13
01/01/14
01/01/15
01/01/17
01/01/18
01/01/19
28
Sources; BIS, The MacroStrategy PartnershipChina – misallocation vs flows
China actual vs required fixed capital formation (rmb trn)
• Chinese capital misallocation is severe, and over the
45 past decade we have seen bad loan crises emerge 2-
40 3 years after every loan boom.
35
•
China actual fixed capital formation (rmb trn)
30 Required fixed capital formation Excess FCF Misallocation is like a funding gap. It bites when
25 funding is scarce, but it can be managed when
20
15
funding is plentiful.
10 • In addition to US induced trade & capital flows,
5
0
China is moving to open up the renminbi bond
market to overseas buyers. I estimate that this will
bring in US$1.2trn of flows to China over four years.
30
Excess global US$ money supply, 6m ann, % Contributions to China's FX reserves, US$bn
500
25
Debt ceiling raised 400
20 QE1
QE2 Reflationary 300
15
200
10 100
5
Now
0
0 -100
-5 -200
CA surplus
-10 Fed tapers -300
Shanghai Capital flows
-15 Treasury draws down -400
-20
Deflationary accord deposits at Fed -500
01/12/05
01/06/14
01/06/01
01/12/01
01/06/02
01/12/02
01/06/03
01/12/03
01/06/04
01/12/04
01/06/05
01/06/06
01/12/06
01/06/07
01/12/07
01/06/08
01/12/08
01/06/09
01/12/09
01/06/10
01/12/10
01/06/11
01/12/11
01/06/12
01/12/12
01/06/13
01/12/13
01/12/14
01/06/15
01/12/15
01/06/16
01/12/16
01/06/17
01/12/17
01/06/18
01/12/18
01/06/19
29
Sources; BIS, The MacroStrategy PartnershipInvestment conclusions #1
Capital Flows Investment theme Investment clock
Miners,
commods
Large XS credit Large XS credit Zone 1 Zone 2 Ind commods
While wages EM stocks
Capital flows Reflationary Inflationary But not miners
are accelerating Short 10yr,
into EM boom bust Short treasuries
Induces inflation Short US$
Credit Shortfall Small XS Credit Short US stocks Tech, Pharma,
US spreads No more flows Zone 4 Zone 3 Short High yield Biotech,
widen. Deflationary Disinflationary
into EM Long gold Long US$
Deflation bust boom Long 10yr Long 10yr
follows.
30
Sources; MacroStrategyHeating up
• Several clients have asked whether yield curve control
US Core PCE vs 5-year 5-year implied inflation
would be good for tech stocks and quality growth
3.5 US 5-year 5 year forward
implied inflation
names. It would not. While the rise in the treasury part
3 of the discount on future earnings would be checked,
Hot
the equity risk premium would rise sharply as inflation
2.5
Warm expectations broke above 2.7% or so.
Temperate
2 Schiller Cyclically adjusted PE, S&P500
Zone
Cool 50
45
1.5 40
Inflation depresses PEs
Cold 35
30
1 25
01/03/03
01/03/08
01/03/13
01/03/18
01/01/99
01/11/99
01/09/00
01/07/01
01/05/02
01/01/04
01/11/04
01/09/05
01/07/06
01/05/07
01/01/09
01/11/09
01/09/10
01/07/11
01/05/12
01/01/14
01/11/14
01/09/15
01/07/16
01/05/17
01/01/19
01/11/19
01/09/20
20
15
10
5
0
1881
1884
1887
1890
1894
1897
1900
1903
1907
1910
1913
1916
1920
1923
1926
1929
1933
1936
1939
1942
1946
1949
1952
1955
1959
1962
1965
1968
1972
1975
1978
1981
1985
1988
1991
1994
1998
2001
2004
2007
2011
2014
2018
2020
S&P vs estimated equity risk premium
4000 S&P (lhs) 16 Dupont analysis of RoE drivers
3500 14
3000 Estimated equity risk premium 12
RoE
(rhs)
2500 10
Debt to equity
Asset turns ratio
2000 8
1500 6 Current Long term
liabilities debt
1000 4 Profit margin
500 2
Cash Inventory Interest Current
0 0 Sales
expense assets
01/12/03
01/07/04
01/02/05
01/09/05
01/04/06
01/11/06
01/06/07
01/01/08
01/08/08
01/03/09
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01/05/17
01/12/17
01/07/18
01/02/19
01/09/19
01/04/20
01/11/20
EBIT
SG&A
expenses Depreciation
Receivables Fixed assets
COGS 31
Sources; The MacroStrategy PartnershipInvestment conclusions #2
Selected short duration Japanese equities, years Selected short duration European equities, years
16 14
14
12
12
10 10
8 8
6
4 6
2 4
0
2
0
Selected short duration UK equities, years Equity duration, years
12 100 164 812
90
10 Long duration risk
80
70
8 60 Short duration value
50
6 40
30
4
20
10
2
0
0
32
Sources; BIS, The MacroStrategy PartnershipInvestment conclusions #3
% of DCF fair value beyond 10 years, generic modelled • Long duration risk companies, by definition, have
90% companies most of their DCF value from projected earnings
% of DCF value
80%
more than 10 years out
more than 10-years out.
70% • This makes them highly vulnerable to a rise in bond
60%
yields in a reflation, and a rise in equity risk premia
50%
40% in an inflation.
30% • The Fed is constrained in its ability to cap yields too
20% low. In my view, if it does cap 10 year yields, it will
10%
0%
cap them around 3%. That leaves plenty of scope for
5 years 10 years 25 years 50 years 100 years curve steepening.
Equity duration in years
Change in DCF valuation as rates rise, based on equity
duration
100
90
80
70 Value - 5 year duration
Value - 10 year duration
60
Value - 25 year duration
50 Value - 50 year duration
Value - 100 year duration
40
0.7 0.9 1.1 1.3 1.5 1.7 1.9 2.1 2.3 2.5 2.7
33
Sources; The MacroStrategy PartnershipBig Tech anti-trust
Tech Anti-trust Committee Chair David Cicceline & the Big 4 Tech CEOs
This report maintains that the mainstream
media, the sell-side, and investors in general
have underestimated the dedication and
effectiveness of the ‘New Brandeis School’ of
Anti-Trust, led by Lina Kahn, and the degree
to which it has taken over the Democratic
agenda on Anti-Trust in Washington. This
report argues that the New Brandeis School’s
agenda is powerful, radical, and likely to
make significant progress during Biden’s first
term. This has the potential to create a major
shock to Big Tech investors.
Justice Louis Brandeis & Lina Khan Regulators will likely seek several major
changes to the legal and competitive
landscape that Big Tech operates in during
Biden’s first term, which will significantly
curtail its ability to profit from anti-competitive
practise
34
Sources; The MacroStrategy PartnershipDisclaimers
•
• This material has been prepared by The Macro Strategy Partnership LLP. This material is intended as top-down macro strategy
research and should not be seen as offering views or recommendations on individual securities. Opinions expressed herein are
subject to change without notification. Any prices or quotations contained herein are indicative screen prices and are for reference
only. They do not constitute an offer to buy or sell any securities at any given price. No representation or warranty, either express or
implied, is provided in relation to the accuracy, completeness, reliability or appropriateness of the information, methodology and any
derived price contained within this material. The securities and related financial instruments described herein may not be eligible for
sale in all jurisdictions or to certain categories of investors. The Macro Strategy Partnership, its directors, officers and employees or
clients may have or have had interests or long or short positions in the securities or related financial instruments referred to herein,
and may at any time make purchases and/or sales in them. Neither the Macro Strategy Partnership, its directors, employees nor
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Macro Strategy Partnership LLP.
• © The MacroStrategy Partnership 2020. All rights reserved
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