"Christmas rally has started" (From Morgan Stanley)

Os ativos de risco apresentaram ontem um movimento clássico e coordenado de “Risk-On”. Os movimentos, com menor magnitude, mas na mesma direção, persistem nesta manhã. Destaque para a alta de quase 2% no Petróleo neste momento. O Morgan Stanley resumiu de maneira muito ponderada o cenário de curto-prazo:

Christmas rally has started. After a six day winning streak, the MSCI EM equity index has hit its highest level since March with most of the increase seen in AxJ benefiting from its tech exposure. The Hang Seng has breached 30K hitting its highest level for a decade, causing our equity strategists to look for even more gains to come.

Global liquidity remains ample suggesting that only a minor shift of the news flow towards constructiveness was required to push risky assets up once again. Despite China’s deleveraging strategy, it is important to emphasize that the 7-month increase in the PBoC's balance sheet through end of October was the fastest acceleration in years. Those looking at US yield curve flatness as a potential bearish risk factor may be reminded that during the last 30 years, it has taken at least a year after the initial inversion before the recession set in. The economy actually kept growing as the curve narrowed.

A present from the Fed. The performance of the USD and the risk outlook remain negatively correlated which is a typical finding for a funding currency. Outgoing Fed Chair Yellen underlined the Fed stands ready to increase rates gradually citing dangers of inflation staying too low leading towards a damaging downside adjustment of long-term inflation expectations. Interestingly, 5Y/5Y breakeven inflation has declined by 14bps from its late October high now reaching levels last seen in July. Neither higher commodity prices nor China’s upside inflation surprises helped US inflation expectations, underlining the dominance of US wages and the perceived slope of its Phillips curve driving US inflation expectations.

Low wages = high assets. Yellen's warning about the dangers of subdued inflation suggests that monetary authorities may aim for lower real rates and yields to push US capital expenditure growth, labor market tightness and ultimately wages. In addition, the de-risking of China’s corporate balance sheets does require the assistance of strong global economic growth which can be best granted with the US staying accommodative and the USD offered. This 'goldilocks scenario' has received a strong ‘go ahead’ by the content of the Fed Chair’s remarks. For us to turn bearish on assets we need to see either the emergence of higher US wage inflation or the Fed turning for other reasons towards a more hawkish reaction function. Meanwhile, we underline our bullish EM call. When DM real yield levels fall, EM assets look increasingly attractive

No Brasil, os jornais continuam dando enfoque a Reforma da Previdência. Segundo a mídia, ainda há resistência ao texto apresentado e ainda não há votos suficientes para a aprovação. A “Reforma” poderia ser ainda mais enxuta do que o previsto anteriormente. Acredito que estes ruídos sejam naturais, que uma reforma branda seja o cenário mais provável, mas que o texto ainda demanda articulação política para angariar os votos necessários. Este tipo de ruído faz parte do processo político e é natural que um jogo de demandas seja feito em busca de cargos e orçamento antes que os votos necessários sejam angariados. Tenho pouca sensibilidade, neste momento, para ter convicção na real probabilidade de aprovação da Reforma da Previdência, mas vejo um esforço e uma articulação grande por parte do Governo que, no passado, sempre levou a resultados positivos.