From: 'Ens, Amanda" To: "Jeffrey [email protected]> Subject: MEGA AM: Risk Parity Scenario Tool Date: Tue, 09 Aug 2016 15:11:37 +0000 Inline-Images: 805518634.png; 1684421316.jpg; 1754324245.jpg; 486268078.jpg; 94382390.jpg; image001gif01D1F22E14C669E0.gif L;;cid:389 17479 Summary: We expect US nonfarm productivity to increase 0.6% qoq saar, up from -0.6% in 1Q. Japan: After a decent JGB auction jLyieldc decline further in the super long sector domestic investors cooking-positive yields could loco the last destination for their demand Global Equitaalatifity_Insights• Last week's sharp cell-off in JG.Rc renewed concerns of forced spillway risk panty funds We provide a simple scenario tool. UK: GBP traded below 1.3000, after comments from the BoE's Ian McCafferty and J-Curve worsens trade balance. Situation Rnom• We find that the ROE and ECB cornnrate bond QLgingrams are creating a lot of attractive relative value in the dollar market as Spanish lOy Bond Yields fall below 1% for the first time. In Gold we are still seeing further interest by investors to buy year-end upside. China: h& CPI inflation eased to 1.8% ygy from 1.0% in Jun on lower food inflation. The Reserve Bank of India held the repo rate unchanged in today pshcy meetingsang continued upside rinks to the 5% inflation target to be achieved by March 7017. We expect US nonfarm productivity to increase 0.6% qoq saar, up from -0.6% in 1Q. However, it would still result in the year-over-year rate slowing to 0.1% from 0.7% in 1Q. With productivity improving, unit labor costs likely slowed to a 2.1% pace from 4.5% in 1Q. This translates to a 3.1% year-over-year pace versus 3.0% in 1Q. Iapan• If yields decline further in the super long sector domestic investors seeking positive yields could lose the last destination for their demand Excessive easing by the central bank could end up depriving the market of lower risk assets and raising systemic risk. Japan: All eyes were on the 3