1 ar clone ace aloe JPMorgan [email protected] 09 November 2012 e Asaresult, we stay underweight US equities and have moved risk from our aiv2gichel COP grewth foresasts-JP Morgan and : : wins : : ; Consensus US credit longs into Europe. Our initial US equity underweight was against " Europe and EM Asia. Our recent downgrade of Q1 growth in the Euro area and better activity data in China made us move the lion’s share of the 40 overweight versus the US into EM Asia (see Wednesday’s Global Market Outlook and Strategy). 35 Consensus e Chinese activity data continue to surprise on the upside. October data for x IP, retail sales and fixed investment each came above our expectations. This ; JPM creates upside risk, but no change yet, to our forecasts which already assumea 5, gentle rise in quarterly growth rates from under 7% early this year to just above 8% in Q1. Better data reduce the need for renewed fiscal and monetary 20 stimulus. The 18th Party Congress started yesterday, will last a week, and will Jan-11 May-11 Sep-11. Jan-12 May-12 Sep-12 be followed by the announcement of the next leadership. More important for ; ; . . . . Source: J.P. Morgan, Consensus Economics. Consensus Economics the economic outlook will be the Annual Central Economic Working forecasts are for regions and countries that we averaged using the Conference that will be held in December. We expect it to support continued —_same 5-year rolling USD GDP weights that we use for our own global moderate fiscal policy, a neutral monetary policy, and further economic growtfrfareeast rebalancing towards domestic consumption. It may also lower the 2013 2013 global GDP growth forecasts: JPMorgan and growth target to 7%. For more details, see Haibin Zhu in today’s GDW. Bonseresux Fixed Income 3.4 e Bonds rallied strongly, in the slipstream of the tumbling equity market. President Obama’s re-election perhaps also diminishes expectations of a 3.2 aneeowus change in course at the Fed. e The ECB and the